Kazakhstan’s president, Kassym-Jomart Tokayev, has suggested establishing a nuclear power plant to support the country’s crypto mining boom in the face of the country’s energy problem.
The recommendation was made during a meeting with bankers on November 19th, as part of a series of suggestions aimed at “increasing the contribution of the domestic financial sector to economic development and citizen well-being.”
Following China’s restriction on cryptocurrency mining, Kazakhstan became a favorite destination for Chinese miners. The lack of government meddling in crypto mining, along with low energy prices, has propelled the country to a hopeful future.
According to the Index’s IP data from the Cambridge Centre for Alternative Finance, Kazakhstan is second only to the United States in terms of global control of Bitcoin mining power, with an 18.1 percent share of the world’s hash rate. This suggests an increase in demand for which the country’s energy supply was not prepared.
Tokayev acknowledged that the country is “already facing the first indications of power constraints in Kazakhstan,” blaming it on the rapid rise of crypto mining activities. Power consumption has surged at unprecedented rates, with an 8 percent increase (1,000 to 1,200 megawatts) expected in 2021, compared to a previous 1% to 2% annual increase.
The president now talks about the necessity to make “a difficult decision,” despite the fact that prior suggestions of building a nuclear power plant drew massive outrage and condemnation in 2019. Still, he now believes that “the responsibility of a leader is to make hard decisions.”
“I believe that we will eventually come to such a decision because we are already feeling the first signs of an electricity shortage in Kazakhstan. Of course, there is no total deficit; the balance is roughly zero; but the first signs are indicated, and as a result, we will have to make inherently unpopular decisions on the construction of a nuclear power plant.”
Tokayev’s proposal to establish a nuclear power plant is not his first. In 2019, he met with Russian President Vladimir Putin, who offered aid in technology and training.
This idea was not well accepted by the Kazakhstan population, who are concerned about the environmental repercussions, prices, energy dependency on Russia, and the country’s prior history as a testing ground for atomic weapons.
Until recently, the public’s reaction has been strong enough to push the concept to the sidelines. Tokayev says that this is something they must do and that there is no other option. Although the energy situation is not yet dire, the Energy Ministry has stated that the country would import Russian electricity for the winter.
In 2019, the president stated that “the choice to build the nuclear power plant would not be taken without considering the opinion of the majority of our country’s population.” Now, some are wondering if his views on this issue have changed.
Furthermore, Kazakhstan’s president stated that it is vital to “soberly analyze the dangers and possible impact of cryptocurrencies on the present financial system,” and he advocated for a balanced regulatory framework that permits the nation to create its crypto exchanges.
He stated that they do not see “any financial return” from crypto manufacturing and hope Kazakhstan will benefit from new inventions.
“We must assume that we are only at the beginning of the route of developing a new creative economy, a financial ecosystem; there is much work ahead of us; and, as the Head of State, I consider the transition of our whole economy to new railways of inventive development to be a priority mission.”
