Kyrgyzstan, a notable country in the crypto mining landscape, has experienced significant developments related to the industry. According to local news reports, the Kyrgyz government collected approximately $883,000 in taxes from crypto miners in the first 11 months of 2023, marking a substantial increase compared to previous years.
The tax revenue from crypto mining varied throughout 2023, with February seeing around $8,284 and August reaching as high as $130,212. However, by November, the revenue stabilized at about $85,767 after a drop from August’s peak. Access NEWSLINKER to get the latest technology news.
Despite offering benefits such as cheap electricity, Kyrgyzstan currently has only one officially operating crypto mining company. The tax revenue for the first 11 months of 2022 was $133,200. The tax rate in the country, including value-added and sales taxes, is equivalent to 10% of the cost of electricity.
Kyrgyzstan’s government highlights the country’s vast water resources, including glaciers, high-altitude lakes, and rivers, totaling over 35,000 km in length. Although these resources are underdeveloped, crypto miners in the country rely heavily on hydropower.
President Sadyr Japarov approved the establishment of a crypto mining facility at the Kambar-Ata-2 Hydroelectric Power Plant in July 2023. Crypto miners are taxed at a rate five times higher than that of the Kyrgyz people.
Bitcoin production in 2023 faced obstacles due to low reservoir levels and delivery limitations from contracts with neighboring countries, forcing miners to import power, sometimes struggling to find imported power. Despite the legal status of crypto exchanges, Kyrgyzstan lacks specific regulations for the crypto market, even as the industry consumed 17 million KWh of electricity by early October 2023.