As crypto miners are concentrating more in Kazakhstan, the government is working on catching up. Now, the president of Kazakhstan introduced a surcharge for electricity used by crypto miners — the so-called Tax Code of the Republic of Kazakhstan.
At the moment, there are approximately twenty mining facilities in Kazakhstan. Crypto mining is already a highly expensive procedure with lot’s of overhead costs. Therefore, if taxes become too high in Kazakhstan, it might cause miners to find the place less congenial to their needs than they thought originally.
The new laws will be enacted at the beginning of next year. At the moment, there are approximately twenty mining facilities in Kazakhstan. After China banned all crypto mining back, many miners flocked to Kazakhstan which was already a popular place for farms. One of the largest Bitcoin mining companies in China, Bit Mining, has already delivered hundreds of machines to Kazakhstan.
Right now, Kazakhstan ranks in 4th place as one of the world’s crypto mining centers with a hash rate of over 6%. The country is known for it’s highly affordable electricity costs. In fact, it is the cheapest place to mine Bitcoin in the world. The President of Kazakhstan also takes very seriously the practice of renewable energy. At the end of may, he held a conference working with lawmakers to install a viable plan for renewable energy. The President said that he expects the renewable energy filed to grow enormously. The government has also developed a plan for incentives to provide businesses who use sustainable energy.
The government of Kazakhstan is eyeing regulation
The Prime Minister of Kazakhstan, Alikhana Smailova, last month released a document which revealed the government has considered at great lengths the crypto industry and has already developed proposals for how to regulate the industry. And some government officials in Kazakhstan have proposed that the government itself should control crypto exchanges. Also, in the document last month, it was revealed that exchanges will be required to meet certain standards in order to conduct business transactions.
Additionally, the Bank of Kazakhstan has already begun experimenting with a bank backed digital currency.
Government officials in Kazakhstan are not oblivious to the cash cow that the crypto industry is. While they might appear friendly to miners and crypto busineses at the moment, it seems like their intentions come from opportunistic intentions.
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Aaron is passionate about blockchain and has been an investor in cryptocurrencies for the past years. He enjoys engaging with other people in the cryptocurrency community online, particularly on Telegram, and learning from experts.