The President of Kazakhstan has signed a new law requiring cryptocurrency miners to pay higher extra fees to operate in the country.
President Kassym-Jomart Tokayev has recently, officially signed into law a new law amending the previous law on taxes and other payments. The bill, which was voted on by the Senate in June, will come into force in 2022 and create new fees specifically for crypto miners. A special rate for 1 tenge (approximately 00 0.0023) extra charge (kilowatt) per kilowatt will now be enforced for any crypto mining activity in Kazakhstan.
While this move by the Minister of Digital Development, Innovation and Aerospace Industries Bagdat Musin said that
“The bill tends to bring miners out of the gray zone.”
The minister also said the companies that are being deported to China and moving to other areas are using large-scale electricity, which could be used elsewhere for better use. Alber Rau, the legislator who wrote the bill, said he could not see a future that would have “critical consequences” without passing such a bill regarding crypto mining.
While Musin along with the others believe that there will be no incredible increase in electricity prices for miners, the mining community also has a different view. While according to the National Associate Blockchain and Data Center Industry in Kazakhstan, this decision will significantly affect the investment attractiveness of the industry. Cryptocurrency advocates believe the move is inappropriate due to recent developments in China related to crypto mining. Many believe that this is the only way to financially utilize the industry that needs a new home.
The main concern for many in the industry is that these additional fees could deter Chinese mining activities that are seriously looking for a place to work. Kazakhstan is one of the best immigration options for miners due to its low electricity cost. Some important activities have already begun to plan major structures in the country. Taking in the example of, Bit Mining which recently has announced plans to build a 100 MW mining plant in the area and has partnered with two other local companies.
While seeking such opportunities Mining hardware maker Canaan has also opened a service center in Kazakhstan. As more and more miners are thinking about jumping into the Central Asian Region.
There are currently about 20 crypto farms in Kazakhstan, and that number is expected to increase as the ban continues in China.
Kazakhstan is currently ranked fourth in the world in the mining competition, behind China, Russia, and the USA. However, the minimum power/rate from Kazakhstan is $0.03 per kilowatt. Close rival Russia charges $0.06 per kilowatt, while the US charges $0.12. These figures show why miners are flocking to these countries and that Kazakhstan has surpassed rival prices despite high taxes.
In addition to the price, Kazakhstan is also a desirable destination for minors because of its political stability, policy towards a green economy, and the convenience of being able to set up a legal entity there.
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