The Geopolitics behind the Cryptocurrency Mining in Kazakhstan

Overview & Synopsis

On 25 January 2022, following a beginning to the year which had been affected by major political unrest resulting in the deaths of more than 230 people 1 , Kazakhstan was hit by a major power blackout. For around twelve hours, the entire southern regions of the country were left without power, as were Uzbekistan and Kyrgyzstan, two neighboring countries with which the southern country shares the same electricity network. This event is the culmination of several months of over-consumption, power surges and localized outages on the Central Asian networks. In Kazakhstan, electricity consumption rose by 8% in 2021, according to Ministry of Energy 2 , the national electricity operator, compared with the 1-2% annual increase previously recorded. This explosion in consumption is said to have been driven by the widespread development of cryptocurrency mining, a digital activity that can be extremely energy-intensive when operated on a large scale.