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Uzbekistan increases crypto miners electricity tax

Uzbekistan increases crypto miners electricity tax

In a bid to motivate the rational use of electrical energy, the government of the Republic of Uzbekistan has decided to triple electricity tax for crypto miners.

September 30, 2019, | AtoZ Markets – The government of the Republic of Uzbekistan has decided that they will increase the electricity tariffs for cryptocurrency miners by 300%.

Crypto miners in Uzbekistan slammed with 3x electricity tariffs

As per the announcement dated September 27, the Cabinet of Ministers of the Republic of Uzbekistan has ordered that those who mine cryptocurrency must pay three times more the existing electricity tariffs. 

This new tax follows an August 22, 2019 decree from President Shavkat Mirziyoyev entitled “On Accelerated Measures to Improve Energy Efficiency of Economic Sectors and the Social Sphere, Implement Energy Saving Technologies and Develop Renewable Energy Sources” and to further motivate consumers to use electrical energy in a more efficient way.

At the moment, Uzbekistan electricity price for general consumers is around 3.5 cents per kWh. With mining being very energy-intensive, companies seek out jurisdictions with lower power costs in order to maximize their return on investment.

Uzbekistan’s approach to cryptocurrency

In September 2018, the President ordered the establishment of a state blockchain development fund dubbed the “Digital Trust.” The fund’s primary goal is to integrate blockchain into various government projects, including healthcare, education and cultural areas. The organization is set to be responsible for international investment in the Uzbek digital economy.

Earlier the same month, Uzbekistan officially legalized the trading of crypto assets and also making it tax-free. As a result, crypto mining operation in the country came into force. As the law stipulates, foreigners can only trade cryptocurrencies in Uzbekistan by creating a subsidiary in the country.

The law also states that a minimum capital requirement of roughly $710,000 to establish a crypto exchange. Furthermore, crypto traders will not fall under Uzbek stock market regulations and will be relieved of their obligation to pay taxes on trading revenues.

Meanwhile, the Iranian government has decided to cut power to crypto miners until new energy prices were approved. The crackdown which started after the month of June saw a 7% increase in electricity consumption over a monthly period ending on June 21, 2019. Iranian authorities also confiscated around 1,000 Bitcoin mining machines from two abandoned factories.

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Disclaimer: The views and opinions expressed in this article are solely those of the author and do not reflect the official policy or position of AtoZ Markets.com, nor should they be attributed to AtoZMarkets.

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