Kyrgyzstan Raises Electricity Rates for Cryptocurrency Miners – Mining

Recently, the government of Kyrgyzstan revised its electricity tariffs to suit different groups of customers. Bishkek authorities have increased the prices at which cryptocurrency mining companies can buy power, citing the high-energy nature of the coin minting process.

Cryptocurrency Miners in Kyrgyzstan Will Pay More for Electricity

The price of electricity required to create digital currency will rise for crypto mining companies operating in Kyrgyzstan. This increase is due to a government decision that updated electricity rates across the board to “ensure stable and reliable functioning in the energy sector.”

Officially, the changes were made as part of the Medium-Term Tariff policy for electricity (2021-2025) that was approved by Cabinet of Ministers. The revision affects 14 end users groups, including cryptocurrency mining entities. The published documents explain that the base tariff for this category of consumers is calculated using a multiplier factor 2.0.

For every kilowatt-hour they use of electricity, crypto miners will be charged 2.52 Kyrgyzstani som (less that $0.03). According to government statistics, the new rate represents an increase of 12.5%. The new tariff policy covers the four remaining years. Prices will be adjusted annually to reflect average inflation for each year.

Authorities in Kyrgyzstan listed crypto mining farms as well as enterprises in the gold mine industry and producers of alcohol beverages among those who require large amounts of power. According to the government, these tariffs have been revised to reflect the increased operating costs of country’s thermal power plants and the distribution costs.

The Republic of Kyrgyzstan, in Central Asia, is a popular spot for cryptocurrency mining. It attracts miners because of its low electricity prices. The government of Bishkek is taking steps to regulate this growing industry.

The Ministry of Economics presented a bill in August 2020 to tax mining activities. A draft law proposes a 15% tax to be applied to the electricity used for minting digital currencies. To be legally operating in the country, mining companies must apply for registration under the legislation.