Kazakhstan approves Bitcoin Mining Bill

Sahana Kiran
Source – Unsplash

Regulations have been becoming increasingly pertinent in the industry. With the demand for crypto soaring, governments have been trying to protect their citizens. Kazakhstan, a country that rose to fame in crypto town for harboring Bitcoin miners, has been regulating the market. After approving five crypto-related bills, the Kazakh government was making headlines for its latest crypto-mining bills.

It was recently brought to light that the “On Digital Assets of the Republic of Kazakhstan” crypto mining bills were passed by the lawmakers of the country. The lower hours of the Parliament of Kazakhstan called Mäjilis went on to give a green signal to four bills that oversee Bitcoin mining in the region.

Speaking about the latest bill, a member of the Majilis’ Committee on Economic Reform and Regional Development, Ekaterina Smyshlyaeva said,

“The bill, in addition to mandatory accreditation, introduces separate requirements for mining pools in terms of the location of their server capacities in Kazakhstan and compliance with information security rules.”

Here’s how the bill will impact Bitcoin mining

According to the bill, miners will be required to purchase only surplus electricity from the common power grid. Apart from this, miners will be allowed to buy electricity through the Kazakhstan Electricity and Power Market Operator [KOREM] exchange. However, not everyone will be able to make this purchase as electricity would sell in an auction form. Therefore, the highest bidder will be able to make the purchase.

Additionally, it is suggested that mining licenses be split into two groups. The first type includes digital miners in Kazakhstan who possess the necessary facilities, such as data centers with the right equipment, location, and security. Digital miners who lease cells in data centers without claiming an energy allotment are the second kind.

Tax on Bitcoin mining has taken several turns over the last couple of months in the region. From Kazakh President trying to increase tax on crypto mining, the latest bill has brought about a number of changes. It should be noted that Bitcoin miners will be considered formal taxpayers from 2024.

For instance, there would be a corporate income tax levied on miners and mining pools. Value-added tax on individuals that carry out crypto transactions along with corporate income tax on crypto exchanges was also part of the latest bill.