Crypto mining has gained huge popularity in Kyrgyzstan over the past few years. This new digital money is viewed as an investment opportunity.
It was also considered as a replaced solution for payments across the borders. Last October, the Central Bank of the country suspended SWIFT (Society for Worldwide Interbank Financial Telecommunication) transfers and various banking activities due to the raging anti-government protests.
Crypto mining in Central Asia
The Central Asia region has been busy with crypto mining recently and the Kyrgyz Republic is one of them. According to recent report by Bitcoin.com, the Kyrgyzstan government has banned an illegally operating crypto mining farm in Northern part of the country.
Since the ban of cryptocurrencies in China, there has been a huge shift of crypto mining firms. Companies have shifted to Kyrgyzstan due to its cheap power rates.
In October, the Kyrgyzstan government raised the electricity tariff rates for firms related with crypto mining.
Recently, the State Committee for National Security (GKNB) busted a massive illegal mining farm in Druzhba, Issyk-Ata region.
In May 2021, law agencies seized approximately 2000 mining devices associated in minting illegal digital currency. Currently, the committee and investigators are involved in estimating the losses due to illegal mining. And also capture all individuals involved in this activity.
Kyrgyzstan has taken several steps to ease its increasing electricity power deficit and crypto mining sector:
- During August 2020, a bill introducing the taxation of mining activities was introduced by the Ministry of Economy.
- A 15% tax will be charged on the cost of power consumed in the process of minting digital currencies.
- Mining companies are required to register with regulatory bodies to obtain permission to operate in the country.
While Kyrgyzstan, Kazakhstan, Uzbekistan may seem highly attractive to the crypto mining operators. The thing to notice is that none of these countries have acknowledged crypto currencies as a legal tender. .
Kazakhstan Government on Crypto Mining
Cryptocurrencies were banned in Kyrgyzstan till July 2014 after the notice of national bank. The notice said that it is illegal to use Bitcoin or any other crypto currency as a mode of payment.
Currently, the government of Kazakhstan has no official statement regarding the crypto currencies. However, the Astana International Financial Center has reportedly launched a specific authority for Crypto currencies under its own independent governmental power.
Understanding the overall condition of crypto currency miners in Central Asia, MineBest, a company specialised in cryptographic computing activities said :
“Competition for digital mining in Central Asia is growing, as its energy prices are competitive on a global level and the biggest players in the digital mining energy are scouring the globe to negotiate the best deals. Centrally located between Europe and far east Asia, as well as just south of the most popular place for digital mining in the world, Kazakhstan specifically is in quite an ideal location.”