Crypto boom strains Kazakh energy grid

Kazakhstan is struggling to meet the energy needs of its booming crypto mining industry.

The Central Asian country is now the world's second-biggest bitcoin mining location after the United States, according to experts.

Miners have moved en masse into the country, due to its low energy prices, and after China recently banned all crypto transactions and mining.

That's presented a dilemma for local authorities.

The government is trying to decide how to tax and regulate the largely underground and foreign-owned industry.

The power used by miners has forced Kazakhstan to import energy and ration domestic supplies.

Renat Malikov is a director of local mining company BTC KZ.

"Since the beginning of October, we having been facing restrictions. There are periods when the electricity is turned off. There are days when we are provided with only 20% of total capacity to meet our primary needs."

Some see crypto as a way to make a quick fortune.

But many governments are concerned privately run and highly volatile digital currencies could undermine their control of monetary systems.

They believe it could also hurt investors and promote financial crime.

With most Kazakh mining firms powered by aging coal plants, the business is also seen by many as contrary to global environmental goals.

Unregistered operators are thought to consume even more electricity than recognised firms:

"Due to the emergence of many 'grey' miners, companies which mine illegally, there is an electricity deficit in Kazakhstan. Because of the deficit, the government has to limit consumers. And mining companies that work legally, 'white' miners, are the first to fall under the restrictions. Our company is on the list."

Even so, as long as Kazakhstan's energy prices remain capped at artificially low levels, the miners probably aren't going anywhere.

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