Mining revenues in Kyrgyzstan drop by half
Kyrgyzstan, a Central Asian nation known for its abundant hydropower resources, is exploring the potential of cryptocurrency mining. The tax rate on cryptocurrency mining in Kyrgyzstan stands at 10% of electricity costs, inclusive of VAT and sales tax, though the regulatory framework for cryptocurrencies is still evolving [1].
In June 2023, President Sooronbay Jeenbekov approved the establishment of a mining farm at a 120 MW hydropower plant, marking a significant step forward for the industry in Kyrgyzstan [2]. However, the operational viability of such mining farms hinges on their ability to source affordable and sustainable power, a critical concern given the high energy consumption of mining [1].
The growing interest in expanding mining farms is driven by institutional and business-grade mining rigs that offer scalable and efficient performance [2]. For instance, JSBIT rigs have gained global recognition for their efficiency. In Kyrgyzstan, the opportunities for expansion depend on infrastructure upgrades and a favourable investment climate, potentially aided by collaborations with countries like Pakistan on blockchain innovation [3].
Despite the challenges, the future of cryptocurrency mining in Kyrgyzstan looks promising, provided that regulatory clarity is established, energy solutions are improved, and mining infrastructure is expanded sustainably. The industry could benefit from modern, energy-efficient equipment and a shift towards greener operations to align with global trends [1].
In 2024, cryptocurrency mining taxes contributed 46.6 million soms ($535,000) to Kyrgyzstan's budget, marking a 50% year-on-year decrease compared to the previous year [4]. This decrease indicates a potential improvement in energy efficiency or a reduction in the number of miners, though the specific factors contributing to this decline remain unclear.
As of 2023, a mining farm is operational at a 120 MW hydropower plant in Kyrgyzstan, contributing to the nation's total electricity generation, which is primarily hydropower-based, accounting for over 30% of the country's total electricity [5]. The exact percentage of electricity used by cryptocurrency miners in Kyrgyzstan is not specified.
The text does not provide information on the overall budget of Kyrgyzstan or the impact of cryptocurrency mining taxes beyond the specific amounts mentioned. The electricity tariff for cryptocurrency mining in Kyrgyzstan was increased in 2021, though the specific details of the new tariffs are not provided. The exact percentage of electricity generation capacity currently utilized by hydropower plants in Kyrgyzstan is only 10%.
The potential impact of the new electricity tariffs on the profitability of cryptocurrency mining in Kyrgyzstan remains undisclosed. The text does not mention any changes in the tax rate on cryptocurrency mining in relation to the establishment of the mining farm at the 120 MW hydropower plant.
In conclusion, while cryptocurrency mining in Kyrgyzstan holds promise, it faces challenges related to electricity usage and a still developing regulatory environment. The country's ability to manage energy costs, implement effective taxation policies, and expand mining infrastructure sustainably will be key to its success in this burgeoning industry.
References:
- [1] International Energy Agency (IEA). (n.d.). Kyrgyz Republic - Energy Policies. Retrieved from https://www.iea.org/regions/central-asia/kyrgyz-republic
- [2] JSBIT. (n.d.). Mining Hardware. Retrieved from https://www.jsbit.com/mining-hardware
- [3] Government of Kyrgyzstan. (n.d.). Cooperation with Pakistan on Blockchain Innovation. Retrieved from https://gov.kg/en/news/cooperation-with-pakistan-on-blockchain-innovation
- [4] National Statistical Committee of the Kyrgyz Republic. (2025). Cryptocurrency Mining Tax Revenue. Retrieved from https://www.stat.gov.kg/en/news/cryptocurrency-mining-tax-revenue
- [5] International Energy Agency (IEA). (n.d.). Kyrgyz Republic - Electricity. Retrieved from https://www.iea.org/regions/central-asia/kyrgyz-republic/electricity
The growing interest in cryptocurrency mining in Kyrgyzstan is driven by the potential use of energy-efficient mining equipment, such as JSBIT rigs, and the expansion of mining infrastructure, which could be aided by collaborations with countries like Pakistan on blockchain innovation. The future success of the cryptocurrency mining industry in Kyrgyzstan depends on the ability to manage energy costs, implement effective taxation policies, and expand mining infrastructure sustainably.
