Kyrgyz president approves hydropowered crypto mining.

Kyrgyz president approves hydropowered crypto mining.

The Growing Power of Cryptocurrency Mining in Kyrgyzstan

The Kyrgyz Republic, a central Asian state bordering China, is making strides in the field of cryptocurrency mining with the support of its local government. Kyrgyz President Sadyr Japarov has given the green light to the construction of a crypto mining farm at a hydroelectric power plant, as reported by Kyrgyzstan’s national news agency Kabar on July 27.

Harnessing Unused Power

The government of Kyrgyzstan plans to invest up to $20 million in building a cryptocurrency mining facility at the Kambar-Ata-2 Hydro Power Plant. This strategic move aims to address the issue of energy losses associated with non-utilized power from the plant. Since its launch in 2010, the Kambar-Ata-2 power plant has seen a loss of 6.8 billion kilowatt-hours (kWh) of energy, according to President Japarov. By establishing the mining farm, the Kyrgyz government can efficiently utilize the remaining energy and generate additional revenue for the country’s budget.

President Japarov emphasized the benefits of this initiative, stating, “As soon as the mining farm starts working, the earned money will go to the power engineers or, to be more precise, to the ordinary people. Each tyiyn, every kWh will be under the control of power engineers. Everything will be automated and under our control.”

Contradictory Energy Challenges

Interestingly, this recent development appears to contradict Kyrgyzstan’s energy-related news. On July 24, President Japarov announced a state of emergency in the country’s energy sector, scheduled to commence on August 1, 2023, and expected to last until December 31, 2026. The state of emergency stems from climate challenges, a low inflow of water into the Naryn River basin, and the insufficient generating capacity due to excessive energy consumption.

Despite these challenges, the Kyrgyz government recognizes cryptocurrency mining as a potential solution to boost the local economy.

Tariffing and Regulatory Landscape

In the latest report by Kabar, President Japarov highlighted that crypto mining would be subject to the highest tariff rate available in Kyrgyzstan, approximately 5 Kyrgyzstani soms ($0.057) per kilowatt-hour (kWh). This implies that the government aims to ensure fair compensation for the energy provided to the mining farm.

While government authorities in Kyrgyzstan have been increasingly considering cryptocurrency as an economic opportunity, the country has yet to pass any specific laws related to cryptocurrencies. In March 2022, Kyrgyz lawmaker Karim Khanjeza called on the government to legalize the cryptocurrency industry, asserting that “nothing is growing as fast as cryptocurrency.” Though some regulations were introduced for crypto exchanges in 2021, a comprehensive legal framework is still to be developed.


The decision by the government of Kyrgyzstan to build a cryptocurrency mining farm at a hydroelectric power plant demonstrates their recognition of the potential economic benefits of the blockchain industry. By harnessing unused power and generating revenue, Kyrgyzstan aims to boost its economy and address energy-related challenges simultaneously.

However, the government is also aware of the need to regulate this growing industry. Tariffing cryptocurrency mining at the highest rate in the country aims to ensure fair compensation for the energy consumed. The push for legalizing the cryptocurrency industry further underlines the government’s desire to create a suitable regulatory framework.

As Kyrgyzstan ventures further into the blockchain industry, it remains to be seen how this initiative will impact the country’s economy and energy landscape. Future updates and developments concerning the government’s approach to this sector will provide valuable insights into the long-term prospects for cryptocurrency mining in Kyrgyzstan.

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