New legislation proposed by Kazakhstan’s parliament, if passed, would allow only authorized miners to mint digital currencies. The draft aims to comprehensively regulate the industry and reduce what its promoters call uncontrolled electricity consumption in the industry.
Kazakhstan lawmakers submit crypto mining law, seek to curb ‘grey’ mining
Mazhilis, the lower house of the Kazakh parliament, proposed a new bill Introduce rules for the withdrawal of cryptocurrencies in the country. According to its regulations, only companies registered in the Astana International Financial Centre (international Finance Center) or non-resident entities that have agreements with licensed data centers will be allowed to mine digital currencies.
Kazakhstan has become a magnet for crypto miners following China’s crackdown on the industry, while the influx of mining companies has led to growing power shortages. The AIFC is the financial hub of the Central Asian country and the focal point of the government’s efforts to bring the country’s growing crypto industry under regulation.Earlier this year, exchanges registered there allow Open an account local bank.
In a report on the legislative attempt, crypto news outlet Forklog noted that the current process for notifying authorities of mining activities is voluntary. The process is regulated by an order issued by the Minister of Digital Development. Member of Parliament Ekaterina Smyshlyaeva revealed that only a third of all mining companies operating in Kazakhstan are registered.
“The uncontrolled use of electricity by ‘gray’ miners poses a threat to Kazakhstan’s energy security,” the lawmaker insisted. Smyshlyaeva added that the current legislation does not regulate the mechanism for the sale of mined cryptocurrencies or the role of local financial service providers and the circulation of digital assets. “Their production process and the establishment of their property rights are only regulated at the lower legislative level,” she explained.
In the first quarter of 2022, the contribution of crypto mining entities to the state budget reached $1.5 million, according to Kazakhstan’s State Taxation Committee. In July, President Kassym-Jomart Tokayev sign Introduced into law a bill to amend the country’s tax code to impose higher tax rates on crypto miners. The tax now depends on the amount and average price of electricity consumed to mint bitcoin and other cryptocurrencies.
Do you expect the new law to reduce the number of entities authorized to mine cryptocurrencies in Kazakhstan? Let us know in the comments section below.
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