According to reports, the Kyrgyz Republic, a Central Asian state bordering China, is reportedly increasing cryptocurrency mining opportunities with the cooperation of the local government.
Investment up to $20 million
On July 27 reported the Kyrgyz national news agency Kabar hinted to President Sadyr Japarov that there are plans to establish a crypto mining farm at a hydroelectric power station.
The Kyrgyz government intends to invest up to $20 million in the construction of this cryptocurrency mining facility at the Kambar-Ata-2 hydroelectric power station.
The report states that according to the president, by running a crypto mining company, the government can avoid energy losses caused by unused power from the power plant.
A lot of energy is simply lost
Since the launch of Kambar-Ata-2 in 2010, Kyrgyzstan has lost 6.8 billion kilowatt-hours (kWh) of energy to this problem, Japarov said.
Establishing the mining farm will allow the Kyrgyz government to use the remaining energy wisely and bring benefits to the country’s budget, the president noted, stating:
Once the mining farm starts working, the money earned goes to the energy engineers or, to be more precise, to the common people. Every tyiyn, every kWh will be under the control of energy technicians. Everything is automated and under our control.
Temporary energy emergency
Recently, there has been some contradiction in the energy-related news in Kyrgyzstan. On July 24, the Kyrgyz president announced a state of emergency in the country’s energy sector, which was scheduled to take effect on August 1, 2023 and expected to last until December 31, 2026.
Official data pointed to climate challenges, low water inflow in the Naryn river area and lack of generating capacity as causes of the emergency, largely due to significant growth in energy consumption.
In the recent Kabar report, Japarov stressed that crypto mining will be charged at the highest rate in Kyrgyzstan, about 5 Kyrgyz som ($0.057) per kW.
The Kyrgyz government is showing increasing interest in cryptocurrency as an opportunity to boost the local economy.
Legalize crypto industry
At a parliamentary committee meeting in March 2022, Kyrgyz legislator Karim Khanjeza urged authorities in Kyrgyzstan to legalize the cryptocurrency industry. He advocated the development of a legal framework for crypto, arguing that “nothing is growing as fast as cryptocurrency”.
Although some regulations for crypto exchanges were introduced in 2021, the government of Kyrgyzstan has not passed any specific laws related to cryptocurrency to date. Several years ago, a former government official also stated that cryptocurrency mining was a major factor contributing to Kyrgyzstan’s energy crisis.