February 22, 2024

Opinion: IMF requirement on accounting for Georgia's bitcoin mining income impossible

The day before, the International Monetary Fund demanded that the Georgian government take into account income frommining in reports on the country's foreign trade balance.

According to the IMF, Georgia ranks fourth in terms of bitcoin mining and mining accounts for a significant share of its economy.

«Imports of mining equipment are taken into account in official trade balance statistics, but ignoring exports significantly distorts the overall picture»,— believe in the fund.

To assess this data on the sale of cryptocurrencies, the IMF has prepared a special questionnaire, which should guide the official departments of Georgia.

However, local experts deny the country's leading position in the mining market.

«We are not in fourth place. God grant that on the tenth, and that’s in question»,— Alex Sudadze, founder and CEO of Bitcoin Embassy Georgia, said in a comment to ForkLog.

According to him, the fund’s initiative is meaningless, and now the Blockchain Association in Georgia is looking for experts who can explain to the IMF the “real state of affairs.”

Experts are convinced that an attempt to take into account how much cryptocurrency Georgian companies and citizens of the country sell abroad is unlikely to succeed.

«There are many mining companies and individuals operating in Georgia that are not registered anywhere, and cryptocurrency exchange operations often take place outside of exchanges»,— said the founder of the environmentally friendly mining company Golden Fleece, Vakhtang Gogokhia.

There is no mechanism for identifying private miners in the country, agrees Giorgi Avaliani, representative of the Birtvi blockchain company.

«Technically implementing the IMF requirements is verydifficult, because the government will not be able to record who exactly is mining, what their turnover is and where they sell their bitcoins. Reliable information about this will only come from a few large companies that operate in the country»— he believes.

The IMF pilot project so far concerns only two large mining companies, confirms Vakhtang Gogokhiya.

«Information is requested from «daughter»the company emoney.ge, the cryptocurrency exchange MyCoins.ge, as well as the mining company Bitfury. But it will be quite difficult to audit the information they provide,— he points out.

Currently in GeorgiaThere are two energy-efficient Bitfury data centers with a total capacity of over 60 MW. According to local experts, this represents 4% of the total electricity consumption in the country.

The company recognizes itself as the largest Bitcoin miner in Georgia, without disclosing, however, hash rates.

Representatives of Bitfury did not comment on ForkLog how the IMF initiative will affect their activities, promising to later issue an official statement on this subject.

ForkLog requested comments from the MyCoins.ge cryptocurrency exchange, but did not receive a response at the time the material was released.