In Kazakhstan, a new law has come into force that expands the regulatory framework for cryptocurrency miners and restricts their access to low-cost electricity. The legislation introduces a mining license regime with two different categories of licenses that companies must renew periodically.
President Tokayev Signs Law Regulating Crypto Asset Mining and Trading in Kazakhstan
He law “On digital assets in the Republic of Kazakhstan”, signed by President Kassym-Jomart Tokayev on Monday, entered into force. The main objective of the new legislation, approved together with reforms to other legal acts such as the Tax Code, is to regulate the activities related to the issuance and circulation of these assets, among which mining stands out.
The changes are also aimed at creating the conditions for the development of the crypto industry and fair competition among market participants, local media reported. The digital assets law, which was adopted by parliament in late January, defines the powers of state bodies that oversee the sector and introduces licenses for crypto miners and exchanges, replacing the current registration system.
The mining licenses will be granted for a period of three years to two groups of applicants. Entities that own mining infrastructure, such as data centers that meet certain standards in terms of equipment, location, and security, fall into the first category. The second is for those who own mining hardware but rent space on crypto farms and do not request a power fee directly.
A separate set of requirements has been introduced for mining pools. They must have their hardware and software installed in Kazakhstan and comply with the country’s information security standards and other applicable regulations.
Additionally, crypto miners will be allowed to buy electricity from the national grid only if there is a surplus and exclusively from the government-controlled centralized exchange KOREM. However, the price caps for this energy will be eliminated and the commercialization will be carried out based on market principles.
Cheap, subsidized energy was one of the factors that drew mining companies to Kazakhstan after China’s crackdown on the industry in 2021. Authorities in the Central Asian nation blamed the widening electricity deficit on an influx of miners and took measures to restrict consumption in the country. sector, including the temporary disconnection of registered facilities and the closure of illegal farms. On January 1, a higher electricity surcharge was imposed on licensed miners.
Do you think tighter regulations and higher costs threaten Kazakhstan’s status as a mining destination? Share your thoughts on the subject in the comments section below.
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