Kyrgyz President Sadir Japarov has promised to distribute funds from virtual currency mining at hydroelectric power plants to “ordinary people”.
Kyrgyzstan’s state news agency Kabar reported on July 27 that Kyrgyz President Sadir Japarov has approved the construction of a virtual currency mining farm at a hydroelectric power plant.
The Kyrgyz government plans to invest $20 million (about 144 million yuan) in a virtual currency mining facility at the Kambar-Ata-2 hydropower plant. According to Sadir Japarov, operating the virtual currency mining farm will allow the government to avoid energy losses due to unused power from the plant.
Since the launch of the Kambar-Ata-2 hydroelectric plant in 2010, Kyrgyzstan has wasted a total of 6.8 billion kilowatt-hours (kWh) of unused energy, Japarov said. By establishing this dredging farm, the Kyrgyz government will be able to use the remaining energy wisely and for the benefit of the country, the president said:
“Once the dredging farm is in operation, the money earned will go to the energy engineers, or more precisely, to the population. Every dollar, every kilowatt hour will be under the control of the power engineers. Everything will be automated and under our control.
However, this statement somehow contradicts other energy-related news recently published in Kyrgyzstan, where on July 24, the president declared a state of emergency for the country’s energy-related industries, which is expected to begin on August 1, 2023 and end on December 31, 2026.1 According to official data, the state of emergency is expected to end on December 31, 2026. According to officials, the state of emergency is caused by climate challenges, a decrease in the volume of water in the Naryn River basin, and a lack of power generation capacity due to excessive growth in energy consumption.
In Kabar’s latest report, Japarov emphasized that virtual currency mining will take place at the highest tax rate in Kyrgyzstan, which is about five Kyrgyz soms (about $0.057) per kilowatt. The Kyrgyz government’s press office did not immediately respond to Cointelegraph’s request for comment. This article will be updated as new information becomes available.
Government authorities in Kyrgyzstan are increasingly looking to virtual currencies as a way to boost the local economy.2022 In March 2022, Kyrgyz MP Karim Khanjeza called on the country’s authorities to legalize the virtual currency industry during a parliamentary committee meeting. He urged the government to develop a legal framework for virtual currencies, arguing that “nothing grows faster than virtual currencies.”
Although the Kyrgyz government introduced some regulations for virtual currency exchanges in 2021, no virtual currency legislation has been passed to date. A few years ago, a former government official criticized virtual currency mining as the main cause of Kyrgyzstan’s energy crisis.
