Kazakhstan, a major bitcoin mining hub, is creating new laws.
The Mazhilis, Kazakhstan's lower house, enacted three crypto-related laws last Thursday, including "On Regulating Digital Assets in Kazakhstan," according to the parliament website.
World, Kazakhstan, is developing new regulations for the sector.
Last Monday, the Kazakh parliament approved a bill that will tax bitcoin miners corporately and impose national energy usage caps on the sector.
According to the parliament website, the law, titled "On Regulating Digital Assets in Kazakhstan," was one of three pieces of crypto-related legislation approved by the nation's lower house, known as the Mazhilis, last Thursday. The bill will now go to the Senate for consideration and a second vote session. The legislation was just brought up recently, yet the country of Central Asia had been experiencing power shortages at least since the fall of 2021.
The bill must be signed by the president in order to become law if the Senate also passes it. The bill may be referred back to the Mazhilis if the Senate votes on amendments.
Following Beijing's prohibition on the sector in May 2021, Kazakhstan experienced a significant influx of cryptocurrency miners from China's neighbour. China was the largest bitcoin mining hub at the time.
Soon after the new load was placed on Kazakhstan's electrical grid, which is mostly a holdover from the Soviet era, it began to fail. In addition to the miners' demand, technical issues with power plants and interconnection lines significantly worsened the situation. As a result, Kazakhstan, which was a net exporter of power until 2021, now occasionally imports energy from Russia.
According to current discussions, the law will give miners access to around 500 MW. Additionally, government-registered miners will only be permitted to purchase electricity from the grid when there is an oversupply.
In comparison to Kazakhstan's entire mining sector, the promised volume is modest. In Kazakhstan, crypto miners are said to use between 1,000 MW and 1,200 MW of electricity, according to officials.
The bill, which is essential, establishes that miners must pay corporation tax. According to Akhmetzhanov and Bekbau, preferential tax benefits that some high-tech companies in a special economic zone could receive have already been eliminated.
A tax increase on power used by miners was enacted by President Kassym-Jomart Tokayev in August and is scheduled to go into effect at the beginning of 2023. This rate increase is unaffected by the legislation, but it does make sure that miners must pay corporate taxes and cannot exploit the special economic zone to avoid paying higher rates.
According to Bekbau, who believes that the power tax should be repealed, it appears that miners would have to pay double tax, which will reduce their competitiveness on the worldwide market. However, according to the press secretary for the blockchain organisation, the measure only guarantees that the company tax will be "calculated in more depth."
According to local media, the law also establishes two new licencing categories: one is for miners who own and operate infrastructure, and the other is for those who only host their mining equipment in facilities owned by other businesses.
In conclusion, the new law might deter investors. Bekbau claimed that "confidence is already shattered, many investors have left Kazakhstan, and development plans have been abandoned."
