Kyrgyzstan loses mining revenue despite energy advantages
Tax revenue from cryptocurrency mining in Kyrgyzstan halved in 2024, despite the rise in the value of digital assets. According to data from the Ministry of Economy and Finance of the Republic dated December 25, budget revenue from this sector amounted to 46.6 million soms ($535,000), which is 50% less than the 2023 figure of 93.7 million soms ($1 million).
Renewable Energy Potential
Kyrgyzstan has significant resources for the development of mining. According to the International Energy Agency, hydroelectric power plants provide more than 30% of the country's energy consumption, while only 10% of the available hydropower potential is utilized. Miners in the republic are taxed at 10% of the cost of the electricity used, including VAT and sales tax. Experts note that unused hydropower capacities could significantly increase the mining industry's potential in the country.
German Experience for Kyrgyzstan
While Kyrgyzstan seeks effective ways to use its energy potential, the example of Deutsche Telekom is illustrative. The company developed an innovative approach to bitcoin mining by using renewable energy surpluses at production facilities.
Oliver Nyderle, head of Digital Trust and Web3 Infrastructure at Deutsche Telekom MMS, emphasizes the importance of integrating mining into the energy system: "Surplus energy is transformed by miners into digital values. We call this digital cash photosynthesis." The company has already installed mining facilities in Backnang on the premises of the metal and glass facade manufacturer Riva, where equipment management is carried out by Metis Solutions.
Germany's experience shows how competent management of mining can contribute to the development of energy infrastructure. For Kyrgyzstan, with its significant hydropower potential, this approach could be key to increasing industry efficiency and tax revenue. Using excess energy for mining will also help stabilize the country's energy system and create additional income sources for the energy sector.