The new law proposed in Kazakhstan’s parliament would only allow authorized miners to mine the digital currency, if it is adopted. The draft is designed to broadly regulate the industry and reduce what its sponsors label as uncontrolled consumption of electricity in the region.
Lawmakers in Kazakhstan submit crypto mining law, try to curb ‘gray’ mining
Members of the Majlis, the lower house of Kazakhstan’s parliament, have proposed a new bill Introducing rules for the withdrawal of cryptocurrencies in the country. Under its provisions, only companies registered in the Astana International Financial Center (AIFC) or non-resident entities that have agreements with licensed data centers to be allowed to mine digital coins.
Kazakhstan became a magnet for crypto miners following China’s crackdown on the industry and the influx of mining businesses has compounded the power shortage. AIFC, the central Asian country’s financial hub, is at the heart of government efforts to keep the country’s growing crypto sector under watch. Earlier this year, exchanges registered there were allowed to open accounts with local banks.
The current process for notifying authorities of mining activities is voluntary, crypto news outlet ForkLog noted in a report on the legislative effort. The process is governed by an order issued by the Minister of Digital Development. Only a third of all mining companies operating in Kazakhstan have registered, Member of Parliament Ekaterina Smyshlyeva revealed.
“The uncontrolled use of electricity by ‘gray’ miners poses a threat to Kazakhstan’s energy security,” the MP insisted. Smyshlyaeva said that the current legislation does not regulate the sale of mined cryptocurrency or the role of local financial service providers and mechanisms for the circulation of digital assets. “The process of their production and the establishment of property rights for them are regulated only at the sub-legal level,” she explained.
According to the State Revenue Committee of Kazakhstan, the contribution of crypto mining entities to the state budget reached $1.5 million in the first quarter of 2022. In July, President Kasim-Jomart Tokayev signed a bill amending the country’s tax code to introduce higher tax rates. On crypto miners. The levy now depends on the amount of electricity consumed and the average price for mining bitcoin and other cryptocurrencies.
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