Kazakhstan has implemented new laws that seek to control and limit the access of crypto miners to low-cost electricity. A licensing regime has been established that includes two classes of licenses that companies need to renew annually.
President Tokayev Signs Legislation Governing Crypto Mining and Trading in Kazakhstan
The Legislation “On Digital Assets in the Republic of Kazakhstan” was signed by President Kassym-Jomart Tokayev on Monday and came into force. First, the new law will authorize and reform other legal acts such as the Tax Code. This is the responsibility of the manager for the issuance and circulation, which includes mining.
Local media reported that other adjustments are being made to facilitate the emergence of crypto businesses and fair competition among market participants. The legislation on digital assets was approved by Parliament at the end of January. The law defines the powers of the state bodies that monitor the sector and grants licenses to miners and exchanges of cryptocurrencies. It also changes the registration system.
Most likely, mining licenses are granted for a period of three years to two categories. The first is for those who own mining infrastructure that meets certain requirements in terms of location, hardware, and security. The second is for those who own hardware but rent space on crypto farms and do not request a power rate directly.
Mining pools have their own set of requirements. They must have their hardware and software installed in Kazakhstan and comply with the data protection regulations of the country and any other applicable regulations.
In addition, crypto miners will be allowed to purchase electricity from the national grid provided there is a surplus and exclusively from the government-controlled centralized exchange KOREM. This will mean that the price caps for electricity will be removed and that the commercialization of the product will be based largely on market rules.
Cheap electricity was one of the many factors that attracted miners to the area. The government of Kazakhstan is cracking down on the industry in 2021. Authorities in the Central Asian country blamed the rise in electricity shortages on the influx of miners and took measures to curb consumption. On January 1, a higher electricity surcharge was imposed on licensed miners.
Do you think that tighter rules and higher prices will be a threat to mining operations in Kazakhstan? Share your thoughts in the comments section below.
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