Russia supplies Kazakhstan with electricity for cryptocurrency miners
Russia is looking to boost Kazakhstan’s energy needs in a change to the partnership between the two nations, as a means of providing power to miners in the former member state of the former Soviet republic. The move comes amid growing demand for electricity from crypto miners in Kazakhstan, as mining activity sees an uptick.
The development was revealed by the Russian media platform RBC in a recent report. According to the report, the Russian government has demanded a change to the binational energy agreements between the two bordering countries. This development follows the Russian government’s order on the matter.
The change seeks to ensure parallel operation of both countries’ energy systems. As a product of the newly constructed modification, Russia will supply sufficient energy to Kazakhstan, especially for its cryptocurrency mining.
Russia seeks to facilitate this through one of its largest energy holding companies, Inter RAO. Inter RAO’s relevance in this move is due to the fact that it acts as Russia’s only energy import-export supplier.
Russia’s Inter RAO has entered into a commercial contract agreement with the Kazakhstan Electricity Grid Operating Company (KEGOC). The contract will ensure the supply of energy to Kazakhstan through on a buy-and-sell basis between both companies and beyond.
Following China’s crackdown on cryptocurrency mining within its territory, the East Asian country has seen an exodus of mining companies. In an effort to find a more conducive atmosphere, several mining companies flocked to Kazakhstan.
Despite that, Kazakhstan is not without its problems. The Central Asian country has had its fair share of energy degradation problems. Kazakhstan’s growing energy situation is a sign of the importance of the Russian partnership.
Following an energy crisis in Kazakhstan in January, the state energy company cut off several cryptocurrency mining companies – around 200 – from the country’s power supply. Although this disconnection was temporary, it highlighted the delicate situation of the country’s energy sector.
Crypto mining industry in Kazakhstan
Despite this unfortunate indication, most cryptomining firms have remained in Kazakhstan, partly due to the country’s recent lax attitude towards these entities. As Kazakhstan looks to resolve its energy situation, however, the country may adjust its approach to regulating mining companies.
Last week, Kazakhstan presented its first cryptocurrency mining bill to check the industry in the country. Deputies from the lower house of Kazakhstan’s parliament, Mäjilis, presented a bill in this regard.
Within the bill, the House recognized the importance of crypto mining to the broader economy of Kazakhstan. Nevertheless, it was agreed that despite its importance, the industry is largely unregulated in Kazakhstan.
While the country has a legislation that calls for the registration of crypto mining companies, this registration exercise is voluntary. As a result, several firms have taken to bypassing the exercise.
This lack of proper oversight has led to the indiscriminate use of Kazakhstan’s energy for crypto mining, contributing to the country’s energy situation. The House is therefore seeking to propose stricter measures and proper monitoring of the industry.
