Russia is going to supply electricity to the miners of Kazakhstan

The government of the Russian Federation demanded to update the agreement on the joint operation of the energy system of Russia and Kazakhstan, including for the purpose of supplying electricity for the extraction of cryptocurrencies.

The Russian Federation has begun the preparatory stage of organizing the supply of electricity to Kazakhstan for companies mining digital assets. The parties agreed on amendments to the current contract between the two countries and measures to support joint energy networks.

The order of the Russian government states that the only Russian exporter and importer of electricity, the Inter RAO company, is authorized to sell its goods by mining companies that mine cryptocurrencies in the territory of the Republic of Kazakhstan. To do this, the Russian energy provider must conclude relevant agreements with mining enterprises.

Due to the energy crisis in the country, the authorities of Kazakhstan at some point limited the supply of electricity to enterprises mining crypto-currencies and began to fight against semi-legal “gray mining”. Such measures led to the outflow of companies from the country. But this was not enough to stabilize the situation with electricity in the Republic. In winter, the government of Kazakhstan began to consider two options for restricting miners at once: raising electricity prices and imposing a tax on mining equipment. In July, Kazakh President Kassym-Jomart Tokayev signed amendments to the Tax Code that provide for higher tax rates for miners thereafter.

From January 1, 2022, the Republic of Kazakhstan has a tax on the production of cryptocurrencies. According to the results of the first quarter of 2022, miners brought about 652 million tenge ($1.52 million) to the budget of Kazakhstan.