Real-world HPP Energy for Virtual Assets: Cryptoboom in Kyrgyzstan
The virtual asset market in Kyrgyzstan is showing explosive growth – in the first seven months of 2025, the turnover of cryptocurrency companies exceeded 1 trillion soms. Tax deductions to the state budget from this activity, according to the Ministry of Economy and Commerce, amounted to 900 million to 1 billion soms. To date, 169 crypto exchanges, 13 crypto exchanges and 11 mining companies have been officially registered in the country.
Against the background of these economic successes, the country’s authorities are considering amendments to the law “On Virtual Assets”, which introduce concepts such as “state mining” and “state cryptocurrency reserve”. The government plans to use mining, tokenization of real assets and the issuance of national currency-backed stablecoins to accumulate digital assets. It is assumed that the creation of such a reserve will strengthen the financial stability of the country and provide new tools for savings.
However, the initiative caused concern among some deputies due to the enormous energy consumption of mining. It was noted that the production of one bitcoin requires about 800 thousand kilowatt–hours of electricity – this amount would be enough to provide approximately 1,200 apartments for a month. On the eve of the winter season, a reasonable question arose about the expediency of such waste of energy resources that the population may need.
The government assures that separate, higher tariffs have been set for mining, and state-owned facilities will work according to them. According to the Minister of Economy and Commerce Bakyt Sydykov, the capacities of large thermal power plants or strategic facilities such as the Kambar-Ata-1 hydroelectric power station under construction will not be used to extract cryptocurrencies. Instead, the main resource for the production of virtual assets is provided by small hydroelectric power plants. Thus, the real energy generated by the country’s natural water resources is directed to the creation of ephemeral digital products subject to high volatility. Currently, according to official data alone, 17 small hydroelectric power plants have already been involved in Kyrgyzstan for these purposes, and another 15 similar projects are under implementation. Given the pace of commissioning of new small hydroelectric power plants, it is not difficult to conclude that the vast majority of projects for the construction of small hydroelectric power plants in the Kyrgyz Republic are now focused specifically on cryptocurrency mining, and not at all on energy supply to other consumers.
Original (in Russian): Реальная энергия ГЭС для виртуальных активов: криптобум в Кыргызстане
