Kazakhstan’s president, Kassym-Jomart Tokayev, proposed building a nuclear power plant to sustain the country’s crypto mining growth amidst the energy crisis the country is facing.
The suggestion was made during a meeting with bankers on November 19th, following various proposals that aim “to increase the contribution of the domestic financial system to economic development and the well-being of citizens”.
After China’s crackdown on crypto mining, Kazakhstan became a popular place for Chinese miners to migrate to. The lack of interventions from the government on crypto mining and low energy costs turned the country into a promising destiny.
Kazakhstan reportedly stands in second place for the worldwide control of Bitcoin mining power, after the U.S., showing an 18.1% share of the world’s hash rate according to the Index’s IP data from the Cambridge Centre for Alternative Finance. This implies a growing demand that the country’s energy supply was not ready for.
Tokayev accepted the country is “already feeling the first signs of power shortages in Kazakhstan”, considering it to be a result of the rapid growth in crypto mining operations. The power consumption has increased at unprecedented rates, reporting an 8% growth (1,000 to 1,200 megawatts) in 2021 while the regular growth in consumption used to be between 1% and 2% per year.
The president now talks about the need to make “an unpopular decision”, as previous mentions of building a nuclear power plant received huge backlash and criticism in 2019, but he now states “the role of a leader is to make unpopular decisions.”
I think that ultimately we will finally come to such a decision. We are already feeling the first signs of a shortage of electricity in Kazakhstan. Of course, there is no total deficit. The balance is roughly zero. But the first signs are indicated. Therefore, looking into the future, we will have to make inherently unpopular decisions on the construction of a nuclear power plant.
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Will Russia Assist The Power Plant Project
This is not the first time Tokayev has proposed to build a nuclear power plant. Back in 2019, he carried a discussion with Russia’s President Vladimir Putin, who offered assistance in technology and training.
This proposal was not well received by Kazakhstan citizens, who fear the environmental implications, costs, energy dependence on Russia, and the country’s previous history as the Soviet’s atomic weaponry testing grounds.
Citizens’ reaction was strong enough to push the idea aside, until now. Tokayev suggests this is something they must do and there is no other way around it. The energy situation is not the worst yet, but Energy Ministry announced the country will purchase Russian electricity for the winter.
In 2019, the president had said that “the decision to build the nuclear power plant will not be made without considering the opinion of the majority of the population of our country.” Now, some wonder if his views on this point have changed.
Tokayev Wants To See The Return On Crypto Production
Furthermore, Kazakhstan’s president said it is also necessary to “soberly assess the risks and the potential of their impact on the current financial system” of cryptocurrencies, and called for a balanced regulatory environment that allows creating the country’s own crypto exchanges.
He noted they don’t see practically “any financial return” from crypto production and aims for Kazakhstan’ to profit from new innovations.
We must assume that we are only at the beginning of the path of creating a new innovative economy, a financial ecosystem. There is very serious work ahead. For me, as the Head of State, the transfer of our entire economy to new rails of innovative development is a priority task.
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Crypto total market cap at $2,6 trillion in the daily chart | Source: TradingView