February 4, 2023

IMF calls on Georgia to include mining and trade in crypto assets in the foreign trade balance

The International Monetary Fund (IMF) recommends that Georgia include income in its balance sheet reports from cryptocurrency trading and mining.

Media reported that IMF representatives have alreadymet with leaders of large cryptocurrency companies working in the mining industry. Miners were advised to report on foreigners who buy cryptocurrencies from local mining companies. Given that Georgia is the fourth largest cryptocurrency mined in the world, the IMF proposal is not surprising. The IMF said:

“Along with existing programs, the IMF is workingwith Georgia on other issues, including improving statistics. We are conducting consultations on improving the methodology for calculating the foreign trade balance, and, in particular, we are actively discussing the possibility of introducing cryptocurrency mining accounting. ”

IMF experts agree that cryptocurrencymining accounts for a significant share of the Georgian economy. Therefore, the government should closely monitor the industry. Now the international organization is trying to find out the real contribution of cryptocurrency mining to the country's GDP. Mercedes Vera-Martin, Deputy Director of the IMF Division, noted:

“Cryptocurrency mining has both positive,and negative consequences for the country. If cryptocurrency is sold in large quantities abroad, then why should this not be taken into account in the foreign trade balance? ”

She emphasized that BTC mining requires imports.goods, alluding to specialized equipment, such as ASIC miners, as well as materials for the construction of facilities. Moreover, imported materials are taken into account in the official statistics of the trade balance. Thus, reporting on imports and ignoring exports significantly distorts the overall picture.

Last year, the National Bank of Georgia calculatedthe number of digital wallets registered in the country. By that time, 5,300 wallets were discovered in which $ 708,000 were stored. The IMF recommended that the National Bank calculate the number of wallets registered by foreign citizens.

The IMF also prepared a special questionnaire, which should guide the official departments of Georgia to assess the total amount of BTC mined in the country and sold abroad.

Late last year, two companies involvedcryptocurrency mining, topped the list of the largest consumers of electricity in Georgia. Energy-intensive enterprises in the country purchase the electricity they need at wholesale prices. In July this year in Georgia, the exchange of cryptocurrencies for fiat money was exempted from VAT.