Kazakhstan Expects $1.5 Billion From Crypto Mining Estimated in 5 Years – Mining Bitcoin News

Crypto miners now bring more than $230 million into Kazakhstan's economy every year and estimates show that this number could increase significantly in the future. The industry's leading organization has forecast that the government will be able to collect more than $300 million in taxes over the next five years.

Kazakhstan makes millions from cryptocurrency miners

Kazakhstan's growing coin industry has the potential to inject $1.5 billion into the country's economy over a five-year period, resulting in tax revenues of over $300 million, according to the National Association of Blockchain and Data Center Industry, which brings together major companies involved in cryptocurrency extraction for 70% of the mining sector. Budget revenue can reach $400 million with the opening of cryptocurrency exchanges, the organization added.

According to the association's president, Alan Dordzhiev, legal participants in the mining market already bring Kazakhstan 98 billion tenge (almost $230 million) annually. Quoted by local business news portal Inbusiness.kz and crypto news portal Forklog, Dordzhiev also noted:

The figure of 98 billion is only the economic impact of companies that are officially involved in mining. If “gray” miners are taken into account, this number can easily double.

Media reports also indicate that miners are paying 13 billion tenge (over $30 million) to the state-owned power utility KEGOC for electricity distribution and services of the Financial Settlement Center of Renewable Energy. Dordzhiev added that about 500 megawatts (MW) of electricity is consumed by illegal mining operations.

Data compiled by the mining association shows that registered crypto farms earn around $310 million annually from their activities, two-thirds of which is spent on electrical energy generated in the country. While this revenue is welcome, the government in Nur-Sultan recently accused a growing power deficit among crypto miners.

As more mining companies move to Kazakhstan due to low electricity prices, consumption rose 7.4% in the first nine months of the year, reaching nearly 83 billion kilowatt hours (kWh), authorities said revealed last week. A single mining farm is said to require as much electricity as 24,000 households, and meeting the crypto mining industry's growing needs would require an additional 1,000 MW of power generation capacity, according to officials.

To address the challenge, members of the Association of Blockchain and Data Center Industry have put forward a series of so-called “effective solutions.” They believe their approach to the problem can reduce power consumption in digital currency mining by more than 35%.

The organization believes that the fight against illegal mining is the key to Kazakhstan's energy security, but at the same time rejects any restrictions on the legitimate mining industry. Restrictions, Dordzhiev warned, “will not only nullify long-standing efforts to attract foreign investors, but also affect the actual flow of money into Kazakhstan’s economy.”

Do you think Kazakhstan will generate the estimated revenue from its growing crypto industry? Tell us in the comments section below.

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