KEY POINTS
- Bitcoin mining rigs have popped up in some Southeast Asian nations in recent months
- Southeast Asia suitable BTC mining hub due to improving renewable energy transition targets: Marathon Digital EMEA MD
- Marathon Digital sees Southeast Asia as a "key market": Maroj Narender Madnani
- High crypto adoption in the region could help propel Southeast Asia's Bitcoin mining industry
The global Bitcoin and crypto mining industry has been blossoming in recent years, and at center of a less-noticed revolution is Southeast Asia, where growing interest in the industry coincides with improving commitments toward renewable energy transition – a significant duo that could bring about economic value to the region in the long run.
While Southeast Asia still has a long way to go before it can achieve its renewable energy goals, there is already significant growing focus on renewables, Managing Director for EMEA at cryptocurrency mining giant Marathon Digital, Manoj Narender Madnani, told International Business Times. He said the increased focus on transitioning to renewable energy use can lead to higher power generation, making the region a suitable place for Bitcoin mining.
In the Bain & Company, GenZero, Standard Chartered, and Temasek Southeast Asia's Green Economy 2024 Report titled "Moving the Needle" that was released in April, Head of ESG Investment Management and Managing Director of Sustainability of Temasek, Kyung-Ah Park, said Southeast Asia's "biodiversity and abundance of natural resources as well as strategic importance as an industrial hub allows it to leverage nature-based solutions and new technologies for a once-in-a-generation opportunity to ride the green growth wave."
Riding the wave are majority of member states within the Association of Southeast Asian Nations (ASEAN), with many members displaying "a strong commitment to achieving net zero by 2050," as per the World Economic Forum. The 10-member bloc is waiting on the Philippines to commit to the same target, and Indonesia has set its target to 2060.
What does Bitcoin mining have to do with Southeast Asia's renewable energy transition goals? An October 2023 study by a group of scientists from Cornell University found that establishing BTC mining farms "strategically" can maximize productivity and in turn potentially create "a self-sustaining cycle for renewable energy expansion" within the high-energy-usage industry.
As Southeast Asian governments push to reduce the region's carbon footprint, mining rigs have recently been popping out across the region. Lured by cheaper priced power and skilled labor, mining rigs have already emerged in Malaysia, Indonesia and Laos. Their emergence comes following data that found Bitcoin mining operations that utilized sustainable energy hit a new all-time high in January to 54.5%, and also lodged a 3.6% increase during the 2023 calendar year. The data showed that BTC mining was the highest user of sustainable energy across several subsectors.
"The current power distribution does not match the generation, therefore, Bitcoin mining provides a solution that will be able to soak up the excess energy that is being produced," Madnani said.
Additionally, excess gas can be "captured and computed into economic value." At a time when Southeast Asia's economy has been weathering various headwinds, the economic value Bitcoin mining can bring could be what the region needs for further growth.
For Marathon Digital, Southeast Asia "is a key market," Madnani said. "Currently, we are evaluating a few opportunities across this key market," he said.
He acknowledged that there are challenges ahead for Southeast Asian miners who want to get a chunk of the multi-billion-dollar industry. One way through which they can overcome challenges related to establishing Bitcoin mining infrastructure is by being part of a global alliance that could allow them to benefit from the economies of scale, he said.
Amid the challenges, there are also emerging trends in the region that could help propel Southeast Asia's Bitcoin mining industry in the next five years. "The demographics work well and most importantly, this is an area of the world where crypto adoption is relatively high," he pointed out.
In blockchain analytics firm Chainalysis' 2023 Global Crypto Adoption Index, a total of four Southeast Asian nations made it into the top 10, with Vietnam snagging the third spot, and the Philippines taking the sixth spot in the ranks. Just recently, the Philippine Securities and Exchange Commission (SEC) approved a pilot led by local crypto giant Coins.ph for what could be the country's first stablecoin, marking yet another step towards wider crypto adoption.
The region has lots of work to do to push toward both its digital assets adoption and renewable energy goals, but with an "abundance of untapped bioenergy" in the region, Bitcoin mining just may thrive in Southeast Asia.
