The Kyrgyz government recently revised its electricity tariffs for various consumer groups. Bishkek authorities have increased the prices at which crypto-mining companies buy electricity, citing the energy-intensive nature of the minting process.
Crypto miners in Kyrgyzstan pay more for electricity
Companies that operate crypto mining facilities in Kyrgyzstan have to pay a higher price for the electrical energy they need to mint digital currencies. The increase follows a decision by the government to update electricity tariffs across the board in order to “ensure the stable and reliable functioning of the energy sector”.
According to an official announcement, the changes are part of the country’s medium-term tariff policy for electricity (2021-2025) approved by the Cabinet of Ministers. “Mining Entities (cryptocurrency)” is one of the 14 groups of end users affected by the revision. The base rate for consumers in this category is calculated with a multiplication factor of 2.0, as indicated in the published documents.
Crypto miners pay 2.52 Kyrgyz Som (less than $ 0.03) for every kilowatt-hour of electricity they consume. The new rate is the result of a 12.5% increase, government figures show. For the remaining four years of the period covered by the new tariff policy, prices will be adjusted each year to reflect the average annual rate of inflation.
Authorities in Kyrgyzstan have listed crypto mining farms alongside gold mining companies and alcoholic beverage manufacturers as consumers that require 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 cost of distribution, the government said.
The region of Central Asia, in which the Republic of Kyrgyzstan is located, has become a hotspot for mining cryptocurrencies and attracts miners with its low electricity prices. The government in Bishkek has taken steps to regulate the growing industry.
In August 2020, the Ministry of Economic Affairs presented a draft law to introduce taxation of mining activities. The bill provides for a tax of 15% on the electricity costs that are used to mint digital currencies. Legislation requires mining companies to apply for registration to operate legally in the country.
Do you think Kyrgyzstan will keep its electricity prices low enough to continue to attract cryptocurrency miners? Let us know in the comments section below.
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source https://www.bisayanews.com/2021/10/03/kyrgyzstan-raises-electricity-rates-for-cryptocurrency-miners-mining-bitcoin-news/
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