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Kyrgyzstan is quietly becoming a force in crypto mining, with its government set to raise over $1 million this year from taxing the industry.
According to the media outlet 24KG, the nation’s finance ministry reported that it had raised $900,000 worth of tax revenue from crypto miners in the first 11 months of 2023.
This included a bumper month in August, when miners paid the state over $132,000 in taxes.
The ministry’s data appears to point to a growth in crypto mining activity in Kyrgyzstan.
The report notes that mining-related tax payments “began to grow actively in the second quarter of the year.”
February tax payments amounted to just under $8,300, with revenues climbing rapidly in April.
The nation’s Energy Minister Taalaibek Ibraev stated that most crypto mining “farms” in Kyrgyzstan “are affiliated with the owners of small hydroelectric power stations.”
The Kurpsai Hydropower Plant on the Naryn River in Kyrgyzstan. (Source: Ninara [CC BY 2.0])
Kyrgyzstan: A New Crypto Mining Hotspot?
The same media outlet previously quoted Ibraev as saying most power stations’ “generated electricity” was used “for the nation’s own needs.”
But he conceded that many power station owners worked with crypto mining firms “on a contractual basis.”
Regardless, crypto miners have been eyeing Kyrgyz locations with great interest in recent years.
Like Costa Rica and Paraguay, Kyrgyzstan generates much of its power from its river networks.
Power mixes like these can be ideal for crypto mining operations looking to boost their green credentials.
The International Trade Administration wrote last year that Kyrgyzstan “possesses tremendous hydropower potential.”
The body stated that up to 142 billion kWh of energy could be produced in the nation, “of which only 10% has been tapped in installed capacity.” The International Trade Administration added:
“Hydropower accounts for the overwhelming majority of electricity produced in the Kyrgyz Republic (nearly 90 percent).”
Russian officials are hoping to launch “cross-border” CBDC trade in the EAEU (Eurasian Economic Union), a five-member economic bloc of former Soviet states that includes Russia, Belarus, Kazakhstan, Armenia, and Kyrgyzstan, sometime in 2024.
