Kazakhstan’s cryptomining industry was initially boosted by China’s tightening grip on digital asset regulation, but some seven months down the line, it’s emerging that Kazakh-based miners are fed-up with electricity shortages, cryptoslate.com reported. Some miners report nearing bankruptcy due to the national grid’s inability to supply consistent power. Just as the country was emerging as a significant global cryptomining hub, it seems as though things have gone south as miners begin to leave. China had banned financial institutions from dealing with crypto transactions this past May.
After a decade of efforts and $18 billion in state bailouts, Kazakhstan’s banking sector is still in a mess. Just ask the country’s president, Bloomberg News reported. “The financial system is sick,” President Kassym-Jomart Tokayev told a government meeting last month as he railed against declines in business lending and an increase in loans to consumers with little chance of repaying the money.
The new chief of Kazakhstan’s central bank dodged a debt claim in 2014 thanks to a legal system that’s failed to protect lenders from rampant defaults and repeated crises, Bloomberg News reported. In 2014, Yerbolat Dossayev and three business partners were given a reprieve on repaying 1.9 billion tenge, then worth $13 million, that they’d personally guaranteed to the central Asian country’s biggest bank at the time. It’s not clear whether the debt was ever repaid.
The Kazakh authorities are urgently looking for a bank to take over no. 2 lender Tsesnabank as they believe it needs new financing to prevent a collapse, three sources familiar with the discussions told Reuters. Officials from the government and central bank have approached at least three other Kazakh banks and hope to tie up a deal in February, the sources said. They are offering financial incentives for any bank prepared to take it over, Reuters reported.