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IMF: Income from Georgia's cryptocurrency mining should be taken into account

Finance Materials 30 November 2019 15:22 (UTC +04:00)
IMF: Income from Georgia's cryptocurrency mining should be taken into account

BAKU, Azerbaijan, November 30

By Tamilla Mammadova – Trend:

The International Monetary Fund (IMF) recommends that the Georgian government to indicate the cryptocurrency trade figures in the foreign trade balance, as the country ranks 4th in the world in terms of production of virtual money, and accordingly, income from this type of activity should be taken into account, Trend reports with reference to Georgian media.

As IMF says currently, 80 percent of global Bitcoin mining is undertaken in four countries: China, Georgia, Sweden, and the US.

"In terms of impact on the domestic economy, Georgia’s case stands out, as its share in the global mining stands at around 15 percent. At the current market price of Bitcoins (as of August 2018), mining companies in Georgia are receiving an estimated amount of $700 million annually on account of newly mined Bitcoins and transaction fees—about 5 percent of GDP or 10 percent of exports of goods and services. Even though the impact of the mining activity is significant, corresponding transactions are currently not fully captured in the Georgian national accounts and balance of payments," said the organization.

“Along with already existing programs, the IMF is working in Georgia and in other areas, in particular, on the issue of improving statistics. We are consulting on improving the methodology for calculating the foreign trade balance, and in particular, we are actively discussing the possibility of introducing accounting for cryptocurrency mining, ”the IMF representative office said.

According to the fund’s experts, cryptocurrency mining currently occupies a large share in the Georgian economy, and it should be officially taken into account. Accordingly, the IMF is starting to determine the real role of cryptocurrency mining in the country's GDP.

In 2018, the National Bank of Georgia for the first time calculated the number of e-wallets registered in the country. As it turned out, as of the end of 2018, 5,300 electronic wallets were registered in Georgia, which contain an amount equivalent to 2.1 million lari ($708,404).

According to IMF recommendations, the National Bank should also calculate the number of non-resident wallets opened in Georgia.

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