Cryptocurrency

Bitcoin

Metis

Higher

Kyrgyzstan’s economy saw a significant decline in cryptocurrency mining taxes despite the soaring crypto valuations of 2024.
Cryptocurrency mining taxes contributed over 46.6 million Kyrgystani soms, or $535,000, to the country’s economy this year, according to a Dec. 25 budget document <a data-ct-non-breakable="null" href="https://minfin.kg/documents" rel="null" target="null" text="null" title="null">released</a> by Kyrgyzstan’s Ministry of Economy and Finance.
This marked a more than 50% decrease from the crypto mining tax collected in 2023, which was 93.7 million soms, worth just over $1 million, according to local media <a data-ct-non-breakable="null" href="https://24.kg/english/315563_Cryptocurrency_mining_tax_revenues_to_Kyrgyzstan_s_budget_continue_to_decline/" rel="null" target="null" text="null" title="null">reports</a>.
<figure>
 <img alt="Kyrgyzstan cryptocurrency mining tax collection falls 50% YoY in 2024" src="https://s3.cointelegraph.com/uploads/2024-12/019407e4-8e04-70dc-9354-af513b9fcf1f" title="">
 <figcaption style="text-align: center;">
 Kyrgyzstan state budget. Source: minfin.kg
 </figcaption>
</figure>
Kyrgyzstan’s crypto mining tax rate stands at 10% of the electricity fee used by crypto miners in the country, including value-added tax and sales tax.
The country is considered well-suited for cryptocurrency mining operations due to its abundant renewable energy resources, many of which are underutilized.
Over 30% of Kyrgyzstan’s total energy supply comes from hydroelectric power plants, but only 10% of the country’s potential hydropower has been developed, according to a <a data-ct-non-breakable="null" href="https://www.iea.org/reports/kyrgyzstan-energy-profile/sustainable-development" rel="null" target="null" text="null" title="null">report</a> by the International Energy Agency.
Cointelegraph has approached Kyrgyzstan’s Ministry of Economy and Finance for comment.
Related: <a data-ct-non-breakable="null" href="https://cointelegraph.com/news/bitcoin-daily-payments-confirmed-reach-yearly-low-holiday-season" rel="null" target="null" text="null" title="null">Confirmed Bitcoin payments hit yearly low due to holiday illiquidity</a>
<h2 id="bitcoin-mining-could-stabilize-renewable-energy-grids-in-the-future">Bitcoin mining could stabilize renewable energy grids in the future</h2>
Bitcoin (<a data-ct-non-breakable="null" href="https://cointelegraph.com/bitcoin-price" rel="null" target="null" text="null" title="null">BTC</a>) mining may be deployed to stabilize the energy grid in the future, as renewable energy sources often generate a surplus of electricity that can’t be stored.
<a data-ct-non-breakable="null" href="https://cointelegraph.com/news/deutsche-telekom-ventures-into-bitcoin-mining-with-renewable-energy" rel="null" target="null" text="null" title="null">Deutsche Telekom is</a> using surplus energy from renewable sources to fuel its Bitcoin mining operations.
It <a data-ct-non-breakable="null" href="https://www.telekom.com/en/media/media-information/archive/test-bitcoin-mining-infrastructure-for-surplus-energy-1082684" rel="nofollow noopener" target="_blank" text="null" title="https://www.telekom.com/en/media/media-information/archive/test-bitcoin-mining-infrastructure-for-surplus-energy-1082684">said</a> on Nov. 11 that Bitcoin mining rigs will be set up in Backnang, Germany, on the premises of metal and glass facades manufacturer Riva, with the rigs managed by Metis Solutions.
Deutsche Telekom’s pilot project arose from growing renewable energy sources that would otherwise go to waste.
Related: <a data-ct-non-breakable="null" href="https://cointelegraph.com/news/vitalik-buterin-adopts-viral-pygmy-hippo-moo-deng" rel="null" target="null" text="null" title="null">Vitalik Buterin adopts Moo Deng with 88 ETH zoo donation</a>
The country’s growing energy supply from less predictable sources like wind turbines requires more infrastructure to regulate the grid, according to Oliver Nyderle, head of digital trust and Web3 infrastructure at Deutsche Telekom MMS.
Bitcoin mining could be used to regulate the energy fluctuations of the country’s electrical grid, Nyderle wrote in the announcement:
<blockquote>
 “Together with Bankhaus Metzler and RIVA Engineering GmbH, we are taking a step in this direction to test the regulatory effect of Bitcoin miners in the energy grid. Surplus energy is converted into digital values through the miners. We call this digital monetary photosynthesis.”&nbsp;
</blockquote>
The use cases of Bitcoin mining extend far beyond its economic benefits for miners. In Finland, <a data-ct-non-breakable="null" href="https://cointelegraph.com/news/marathon-btc-mining-heating-town-finland" rel="null" target="null" text="null" title="null">Bitcoin mining is warming</a> an entire town of over 11,000 residents with recycled heat from the mining rigs.<iframe width="100%" height="315" src="https://www.youtube.com/embed/VgqDMx_taRw?start=" frameborder="0" allow="accelerometer; autoplay; encrypted-media; gyroscope; picture-in-picture" allowfullscreen loading="lazy"></iframe>
How Much Higher Will Bitcoin Go? | Mark Yusko’s 2025 Predictions. Source: YouTube
Magazine: <a data-ct-non-breakable="null" href="https://cointelegraph.com/magazine/bitcoin-price-correction-hawk-tuah-memecoin-bitfinex-hacker-hodlers-digest/" rel="null" target="null" text="null" title="null">BTC correction ‘almost done,’ Haliey Welch speaks out, and more: Hodler’s Digest, Dec. 15 – 21</a>

Kyrgyzstan cryptocurrency mining tax collection falls 50% YoY in 2024

Table of Contents

Cointelegraph

Other articles published on Dec 27, 2024

SuperEx丨Only 4 days left until 2025: Gains and Losses in the 2024 Cryptocurrency Market

TON Ecosystem Expands with Stablecoins, DEX Growth in 2024

Bitget announces token merger, BGB price increases amid market-wide declines

Africa loses $1.6bn daily to illegal cross-border financial flows – AfDB

Top Coins To Join for Short Term: 6 Coins To Watch for Life-Changing ROI in 2025

Bonk Price Drops 7% Even After The BURNmas Removes $51 Million Worth Of Tokens From Circulation

Join our free newsletter for daily crypto updates!