Kyrgyzstan has seen a slump in its Bitcoin mining revenue in 2024. According to official reports, Kyrgyzstan has seen a sharp drop in mining tax revenue, with the government receiving 50% less in 2024 than the year before.
The central Asian nation, which is well-known for its cryptocurrency mining sector, has likely faced the wrath of a global slump in crypto mining revenue.
Kyrgyzstan Highlights Fallen Crypto Mining Revenue
Compared to 93.7 million soms (about $1 million) in 2023, Kyrgyzstan received 46.6 million soms (around $512,600) in cryptocurrency mining taxes in its most recent budget report. Cryptocurrency mining taxes in Kyrgyzstan are 10% of electricity bills.
This figure highlights both the government’s goal to leverage the industry for economic growth and the challenges miners confront in maintaining profitability in the face of rising operating costs.
As a result, several miners have reduced their operations or sought to relocate to regions with better conditions. As of early 2024, Kyrgyzstan has 31 registered cryptocurrency mining businesses. However, their aggregate tax contributions had significantly decreased from year to year.
Global Bitcoin Miners Face Slump in Mining Revenue
Apart from internal rifts that have caused in slump in Kyrgyzstan crypto revenue, the trend has been a common issue across the globe.
According to a JPMorgan Chase & Co. estimate, a key indicator of profitability for Bitcoin mining operations fell to its lowest level in “recent record” in September. It has been down ever since the Bitcoin Halving event took place.
That, coupled with the global electricity crises and the general shift to AI has caused a dent in mining revenue.
Kyrgyz Parliament’s Decision to Implement CBDC
The fall in the nation’s crypto mining revenue comes at a time when the nation is seeing a rise in crypto adoption. Previously, the Kyrgyz Parliament’s Committee on Constitutional Legislation passed a bill that amends some legislative acts pertaining to the legal status of the nation’s digital currency, the digital Som.
The country’s central bank adopted digital currency concerns at a time when these tendencies are becoming more prevalent worldwide. It coincides with the fact that in Kyrgyzstan, the use of cryptocurrencies has been growing gradually as both local companies and private citizens choose them over conventional financial methods.
Therefore, by 2024, Kyrgyzstan’s cryptocurrencies market is anticipated to generate US$1,529.0k in revenue. It is anticipated that this revenue would rise at a 4.58% yearly rate (CAGR 2024-2025). By 2025, it is projected that there will be 264.20k users in Kyrgyzstan’s cryptocurrency market.