The Kyrgyz government has recently revised its electricity tariffs for various groups of consumers. Bishkek authorities have increased the rate at which crypto mining businesses have purchased electricity, citing the energy-intensive nature of the coinage process.
Kyrgyzstan’s crypto mines will pay more for electricity
Companies operating crypto mining facilities in Kyrgyzstan will have to pay higher prices for the electrical energy needed to make digital currency. The increase follows the government’s decision to update electricity rates across the board “to ensure stable and reliable operation of the energy sector”.
According to an official announcement, the changes are part of the country’s electricity medium-term tariff policy (2021-2025), which has been approved by the Cabinet of Ministers. One of the 14 groups of end users affected by the “mining companies (cryptocurrency)” revision. The base tariff for that category of consumers is calculated as a multiplier of 2.0, the details of the published document.
Crypto miners will pay 2.52 Kyrgyz Som (less than $ 0.03) for every kilowatt-hour of electricity they use. The official figure shows, the new rate results in a 12.5% increase. For the remaining four years of the period covered by the new tariff policy, prices will be adjusted each year to reflect the average level of annual inflation.
Kyrgyz authorities have listed crypto mining farms as significant power supply customers, as well as initiatives by the gold mining industry and alcoholic beverage producers. The revised tariffs for these users take into account the additional operating costs and distribution costs of the country’s thermal power plants, the government explained.
The region of Central Asia, where the Kyrgyz Republic is located, has become a hotspot for cryptocurrency mining, attracting miners with low electricity rates. The Bishkek government is taking steps to control the growing industry.
In August 2020, the Ministry of Economy introduced a bill to introduce a tax on mining activities. The draft law proposes a 15% tax on the cost of electricity used in digital currency. The law requires mining companies to apply for registration to operate legally in the country.
Do you think Kyrgyzstan will keep its electricity rates low enough to attract cryptocurrency miners? Tell us in the comments section below.
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