After revising their policy, the Kyrgyz authorities raised crypto mining power tariffs by 12.5 percent. It’s no secret that crypto mining is a power-intensive process, so miners will take a hit from the increase. This new rule is the Medium Term Tariff Policy for Electricity. According to Bitcoin.com, the cabinet of ministers approved the policy. The official announcement was published on September 30.
In a recent drive, the Kyrgyz capital’s authorities updated electricity tariffs. This will change according to the consumers and their needs. The government has listed it as a major power consumer, along with the beverage manufacturing industry and gold mining industry.
With this measure, the government plans on ensuring the sustainable functioning of power. With regard to crypto mining electricity rates, they will implement the following regulations. Among the fourteen groups part of the revision scheme, cryptocurrencies are one of them. In this category, consumers have to pay a base tariff, which is calculated by multiplying the figure with a 2 factor.
From now on, crypto miners will face charges of about $0.03per kilowatt-hour. Each year, the prices will be adjusted to reflect the normal inflation rate from 2021 to 2025. This will fall under the new tariff policy. The revised tariffs will help balance how much the country’s thermal power plants cost to operate. They will also help cover distribution costs.
The new tariffs arose after there was a rule to place a 15 percent tax on electricity costs. This would apply when it’s used to mine digital coins. According to Bitcoin.com, the policy came about in August last year and was introduced by the country’s ministry of economics.
Under the newly proposed legislation, mining companies will have to register themselves to operate in the country legally. All of these new rules will surely cause the crypto appeal surrounding Kyrgyzstan to fade.
Ever since crypto miners caught wind of the country’s low electricity rates, it has flourished with crypto miners. Most of the crypto miners to start operations in the country are from China. Despite the many crypto mining farms in the superpower country, the communist party government was cracking down on miners. Consequently, they had to resume operations elsewhere. One of these places is Kyrgyzstan.
But despite the country having an impressive reputation as a crypto mining destination, it has a bad impression. An important government figure reported that crypto mining is a major cause for the country’s energy crisis.
According to the World Bank’s latest figures, the country’s population has faced a decrease in electricity crisis. This was when they compared the figures of 2019 to those of a year and even two years prior. But their report doesn’t specify a reason for the decrease.