The cryptocurrency market began to see the result of increased regulatory pressures in early 2022 at the end of the year. Kazakhstan has also been included in the caravan of countries that have taken steps in regulation. The crypto adoption efforts of President Kassym-Jomart Tokayev were known. However, the crypto activities and mining law in Kazakhstan, which includes restrictive provisions, has received parliamentary approval.
A country moves to stricter cryptocurrency regulations
Kazakhstan lawmakers have approved the crypto-asset bill ‘On Digital Assets of the Republic of Kazakhstan’ and other bills regulating crypto mining in Kazakhstan. The law contains prohibitive provisions on many issues. The law includes regulations requiring miners to only purchase excess electricity from the public grid, new tax rules governing crypto, and banning the advertising of cryptocurrency transactions.
From now on, miners will be able to purchase electricity from the communal electricity grid only if there is a surplus. In addition, miners will only be able to purchase through the Kazakhstan Electricity and Energy Market Operator (KOREM) exchange in an electricity auction won by the higher bidder.
New taxes for cryptocurrency activities have also arrived
Meanwhile, it is proposed to divide the issuance of licenses for mining into two categories. Digital miners with infrastructure such as computing centers with appropriate requirements for equipment, location and security fall into the first category. The second category is digital miners who rent cells in computing centers and do not demand energy quotas. Ekaterina Smyshlyaeva, member of the Assembly’s Committee on Economic Reform and Regional Development, said:
In addition to mandatory accreditation, the bill imposes separate requirements for mining pools in terms of the location of server capacities in Kazakhstan and compliance with information security rules.
Also, new taxes have come. In this context, there will be miner tax, mining pool commission, value added tax and similar taxes. In addition, Ekaterina Smyshlyaeva argued that cryptocurrencies and crypto exchange activities are prohibited in Kazakhstan. Crypto activities are only part of an experimental legal regime under AIFC’s jurisdiction. Also, the plan to ban the advertising of crypto trading.
Will the development affect the President’s crypto adoption plan?
President Kassym-Jomart Tokayev approved the legalization of cryptocurrency trading and mining in the country. After that, he also launched several progressive initiatives in the crypto space. Kazakhstan submitted a draft law on crypto mining in September to regulate crypto mining.
As you follow on Kriptokoin.com, Binance received a perpetual license from the AIFC Financial Services Authority on October 6th. In fact, the National Bank of Kazakhstan (NKB) is planning to integrate the central bank digital currency Digital Tenge with BNB Chain. Therefore, while there are steps in this direction on crypto money, the effect of the new regulation is a matter of curiosity.
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