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Kazakhstan crypto mining sector to be regulated with a new bill

Kazakhstan crypto mining sector to be regulated with a new bill
Kazakhstan crypto mining sector to be regulated with a new bill

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According to recent reports, the lower house of Kazakhstan’s parliament recently gave the green light to new bills that will bring additional regulations to the local crypto industry. The new bill is meant to introduce crypto mining rules, requiring miners to create authorized entities and register with the regulators. Of course, they will also be required to pay appropriate taxes.

The government’s decision to tackle mining comes from the fact that Kazakhstan has grown into one of the world’s largest crypto-mining hubs after the miners were forced to leave China. However, the country has since seen a lot of so-called “gray mining,” where miners conduct mining operations without having the necessary license or registering with the government.

To combat the issue, the lower house of parliament approved five new bills that will focus on the mining sector and mining pools. According to one of the members of the Committee on Economic Reform and Regional Development, Ekaterina Smyshlyaeva, the legislation will make it mandatory for the miners to receive government authorization and create legal entities in order to legally mine. They will also be subject to taxation.

A new focus on crypto mining intends to make it legal and green

If the new framework becomes official, it will bring comprehensive taxes on the import of crypto mining gear, as well. Miners will have to exchange up to 75% of the tokens they earn on local crypto platforms, although this rule will not come into effect before 2024. The reason for this is that transferring crypto transactions to Kazakhstani exchanges will make them transparent, as crypto platforms are already subjected to financial monitoring.

As for the need to register mining equipment that enters the country, the authorities hope to eliminate illegal data centers, thus finally solving the problem of gray miners. Kazakhstan has seen a massive boost in crypto adoption, with over a million residents already dealing with digital assets, mostly on international exchange platforms. Now, the government intends to bring them all to the local platforms and do as much as it can to keep the funds circulating inside the country.

This is not the first time that Kazakhstan has attempted to tackle the rise in mining within its borders. Only a few months earlier, the country’s president, Kassym-Jomart Tokayev, signed a bill that required miners to pay higher taxes than other consumers. The percentage that they would have to pay was not fixed, and it depended on several aspects, such as the price of electricity used while mining.

This particular legislation was meant to encourage miners to mine by using green energy only, as those who did typically had to pay less.

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