The Cabinet of Ministers of Kyrgyzstan has recently revised its electricity tariffs for different groups of consumers. The authorities have raised the rates at which crypto mining businesses buy power. They cited the energy-intensive nature of the crypto mining process.
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Crypto miners in Kyrgyzstan will be required to pay a higher rate for the electricity they use to mine cryptocurrencies. The increase follows a government decision to update electricity rates across the board in order to ensure the stable and reliable functioning of the energy sector.
Increased Electricity Rates
On Thursday, September 30, the government officially announced the increase. According to the statement, the changes are part of the country’s Medium-Term Tariff Policy for Electricity (2021–2025). One of the fourteen listed consumer groups affected by the revision is “Subjects of mining (cryptocurrency)”. The published documents explain the calculations for the base tariff.
Total crypto market cap at $2.14 Trillion | Source: Crypto Total Market Cap from TradingView.com
Crypto miners will pay a 2.52 Kyrgyzstani som (less than $0.03) for each kilowatt-hour of electricity they use. Data shows that the new rate is the result of a 12.5% increase in use. For each remaining year of the period covered by the new tariff policy, the authorities will adjust prices each year to accommodate inflation.
They also listed crypto mining farms alongside other companies in different industries as consumers that need significant power supplies. The revised tariffs for these users take into account the additional operating costs of the country’s thermal power plants as well as the costs of distribution.
This resolution comes into force upon the expiration of fifteen days from the date of official publication.
Crypto Regulation In Kyrgyzstan
Many countries in Central Asia have become hotspots for cryptocurrency mining, especially after China’s latest crypto crackdown. Kyrgyzstan is one of those countries attracting miners with its low electricity rates.
The government has been taking steps to regulate the crypto industry.
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In January, the country’s government proposed its first regulatory framework for cryptocurrencies. In August, the government moved one step forward towards cryptocurrency adoption. It introduced a national regulatory framework for crypto trading platforms. Kyrgyzstan’s State Service for Regulation and Supervision of Financial Markets (Gosfinnadzor) developed a draft provision to regulate crypto exchanges. The aim was to establish the legal status of crypto exchanges operating in Kyrgyzstan. It required crypto exchange service providers to ensure measures to counter illicit activities like money laundering and terrorism financing.