- Kazakhstan officially enacted a new law on digital assets that will take effect on April 1, 2023.
- The new law requires cryptocurrency miners to limit energy.
- The law requires mining companies to be licensed by the authorities and make minor adjustments to the tax regime for the industry.
According to a statement on the president’s website, Kazakhstan’s President Tokayev has signed a law restricting the energy use of cryptocurrency miners in the country.
The new law requires mining companies only to use the national grid when there is an excess of electricity, effectively limiting the industry’s energy use. Excess electricity will be distributed to licensed operators, who will bid for electricity.
Miners using renewable energy, importing electricity, or producing their own will not be affected by this limit. The bill also stipulates that mining companies must obtain a license issued by the relevant authorities and make some adjustments to the tax system for the industry.
In addition, the government will approve the list of mining pools that miners can use and force miners to sell their mined cryptocurrencies to crypto exchanges registered in the special economic zone of the country, Astana International Financial Center.
Cryptocurrency miners will be obliged to sell cryptocurrencies mined in Kazakhstan on cryptocurrency exchanges registered with AIFC.
Miners will have to sell half of their crypto to such exchanges by 2024 and 75% by 2025.
The competent authority will record the hardware used for digital mining (a list of mining equipment located in Kazakhstan). The list of digital assets that can be issued in Kazakhstan will be approved, i.e., there will be specific types of assets/services/assets that can be tokenized.
On the enactment of new legislation, which helps to establish clear rules for crypto business in Kazakhstan and requirements for tracking and taxing crypto business profits.
However, it could increase the cost of the cryptocurrency industry in the country as a whole and seriously impact small-scale miners that may have to decide to leave the country. Besides, large-scale miners may suffer some effects during a crypto downturn.
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