A new law proposed to the Kazakhstan parliament, if adopted, will allow only licensed miners to mint digital currency. The bill is designed to comprehensively regulate the industry and reduce the sponsor’s label of unregulated power consumption in this sector.
Kazakhstan lawmakers submit crypto mining law to try to curb “gray” mining
Members of Mazhilis, the lower house of the Kazakhstan parliament, have introduced a newbillthat would introduce rules for the extraction of cryptocurrencies in the country. Under its provisions, only companies registered with the Astana International Financial Center (AIFC) or nonresident entities that have contracts with licensed data centers will be allowed to mine digital coins.
Kazakhstan has become a magnet for crypto miners following China’s crackdown on the industry, and the influx of mining operations has caused a growing power shortage. The AIFC, the Central Asian country’s financial hub, has become the focus of government efforts to bring the country’s growing crypto sector under supervision. Earlier this year, exchanges registered there were allowed to open accounts with local banks.
The current procedure for notifying authorities of mining activity is voluntary, crypto news outlet Forklog noted in a report on the legislative attempt. The process is regulated by an order issued by the Minister of Digital Development. Only one-third of all mining companies operating in Kazakhstan are registered, MP Ekaterina Smyshlyaeva revealed.
“Unregulated use of electricity by ‘gray’ miners poses a threat to Kazakhstan’s energy security,” the lawmaker argued.Smyshlyaeva said that the current law provides mechanisms for the sale of mined cryptocurrency, local financial service provider’s role and the distribution of digital assets, she added.” Procedures for their production and the establishment of property rights over them are regulated only at the sub-regulatory level,” she explained.
According to Kazakhstan’s State Revenue Committee, the contribution of crypto mining entities to the state budget reached $1.5 million in the first quarter of 2022.In July, President Kassym-Jomart Tokayev amended the country’s tax code to impose higher tax rates on crypto mining entities The bill was signed into law. Taxation now depends on the amount and average price of electricity consumed for the minting of bitcoin and other cryptocurrencies.
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