Kyrgyzstan Supports Crypto Mining Despite Energy Crisis

Crypto mining is subject to criticism in several countries, but this does not seem to concern Kyrgyzstan. On the contrary, the president of the country even thinks of highlighting it, but in a particular way.

Kyrgyzstan encourages the construction of a crypto mining farm

Kyrgyzstan supports crypto mining while many countries, such as the United States, do not see it in a good light. The local government is even considering creating a mining farm to boost activity in the country. According to report According to a Kyrgyz news agency, the local government plans to spend nearly $20 million to build a crypto mining facility at the Kambar-Ata-2 hydroelectric power station.

This initiative, although surprising, is of particular interest to leaders. Indeed, it will limit energy losses and the money earned will be donated to the population. According to statements by Kyrgyz President Sadyr Japarov, his country has lost nearly 6.8 billion kilowatt hours (KWh) of unused energy since the hydroelectric plant was launched in 2010.

With the creation of the mining farm, the remaining energy will be used to increase the budget of the Kyrgyz Republic. However, a report tabled earlier in July challenges those claims.

A great initiative but which could cause many inconveniences

Government authorities in Kyrgyzstan are closely monitoring developments in cryptocurrencies. Indeed, they see them as a golden opportunity likely to boost the local economy. However, the lack of crypto regulation worries lawmakers. As recently as 2021, regulator Karim Khanjeza was urging the government to take action to keep the sector under control.

So far, nothing has been done, although some rules have been taken vis-à-vis the exchanges. As the country prepares to build a crypto mining farm, an announcement from the president dated July 24 sows doubt. According to his statementsthe country will experience a state of emergency which is expected to last from August 1, 2023 to December 31, 2026.

Although the President of Kyrgyzstan has said that crypto mining rates will be expensive and will amount to 5 Kyrgyz soms ($0.057) per KWh, the initiative does not convince regulators. Moreover, a former official of the country thinks that all their energy problems are the work of this activity.

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