ALMATY/OCT. 27 2021 (The Bulletin) — Cryptocurrency miners are continuing to invest in Kazakhstan despite a cap on the amount of power they can use after they were blamed for outages.

Taoping Capital, which is listed on the Hong Kong Stock Exchange, said that it had set up a subsidiary in Kazakhstan called Kazakh Taoping to produce energy-intensive cryptocurrencies.

In a statement, Taoping Capital said that it will spend $3.2m building a data centre in the next six months.

“Kazakhstan is a growing hub for cryptocurrency mining, we believe the completion and operation of the project will create greater value for our shareholders and clients,” Taoping Capital chairman Jianghuai Lim was quoted as saying.

And here lies the quandary for Kazakh government officials. Since China evicted cryptocurrency producers this year because of their excessive energy use, many have set up in Kazakhstan where electricity is relatively cheap and effectively subsidised by the government. The problem is that while they generate investment, Kazakh officials have also blamed them for excess energy use which they say has crashed the systems.

Kazakhstan’s National Association of Blockchain and Data Centre Industry said that cryptocurrency miners bring in 98b tenge per year, around $1.5b, but the government has also said that a single cryptocurrency production centre uses the same amount of energy as 24,000 homes.

–ENDS–

— This story was published in issue 505 of the Central Asia & South Caucasus Bulletin, on Oct. 28 2021

— Copyright the Central Asia & South Caucasus Bulletin 2021