Kyrgyz President Sadyr Japarov vowed to donate money from crypto mining at the hydroelectric station to “ordinary people.”
The Kyrgyz Republic, a central Asian country bordering China, is apparently expanding its bitcoin mining capabilities with the assistance of the local government.
Kyrgyz President Sadyr Japarov has approved the construction of a crypto mining farm at a hydroelectric power station, according to Kyrgyzstan’s national news agency Kabar on July 27.
Kyrgyzstan’s government intends to invest up to $20 million to construct a cryptocurrency mining plant at the Kambar-Ata-2 Hydro Power Plant.
The president stated that maintaining a crypto mining farm will allow the government to prevent energy losses linked with unused power from the power plant, according to the newspaper.
According to Japarov, Kyrgyzstan has lost 6.8 billion kilowatt-hours (kWh) of energy since the introduction of Kambar-Ata-2 in 2010. The president stated that by building the mining farm, the Kyrgyz government will be able to use the remaining energy responsibly and benefit the country’s finances.
The report runs counter to recent energy-related news in Kyrgyzstan. On July 24, the Kyrgyz president declared a state of emergency in the country’s energy industry, which will begin on August 1, 2023 and terminate on December 31, 2026. Climate problems, a low inflow of water into the Naryn River basin, and a lack of generating capacity due to unsustainable growth in energy demand are causing the emergency scenario, according to government data.
Japarov highlighted in the current Kabar article that crypto mining will be taxed at the highest rate available in Kyrgyzstan, or roughly 5 Kyrgyzstani soms ($0.057) per kW.
The Kyrgyz government’s press office did not immediately react to Cointelegraph’s request for comment. This article will be updated as new information becomes available.
Kyrgyz government officials are increasingly looking at bitcoin as a way to help the local economy.
During a parliamentary committee meeting in March 2022, Kyrgyz MP Karim Khanjeza urged Kyrgyz authorities to legalize the cryptocurrency business. The official encouraged the government to create a cryptocurrency legal framework, claiming that “nothing is growing as fast as cryptocurrency.”
Despite adopting some regulations for cryptocurrency exchanges in 2021, Kyrgyzstan’s government has yet to pass any crypto-related legislation. A previous government official also claimed a few years ago that bitcoin mining was a key contributor to Kyrgyzstan’s energy crisis.
