As per reports, crypto miners in Kazakhstan will be required to obtain a license. The reports further added that members of the parliament introduced an industrial bill on crypto.
Mazhilis, Kazakhstan's lower house of parliament, introduced the measure on Wednesday, October 12.
As per reports, members of the parliament introduced an industrial bill on cryptocurrency, along with four other initiatives. The bill's goal will be to provide a legal framework for the creation and distribution of digital assets. These proposals seek to address the legal barriers to digital mining regulation.
According to Ekaterina Smyshlyaeva, a member of the Mazhilis Committee on Economic Reform, the Kazakhstan government intends to implement legislative procedures to regulate cryptocurrency miners' electricity consumption. The Ministry of Energy will impose additional quotas depending on energy usage volumes.
The proposals, as per the deputy, will provide fresh opportunities for investment in new energy generation plants. Smyshlyaeva further stated that earlier mining operations were carried out by non-residents in cloud services. She continued, saying:
“The blockchain industry exploited Kazakhstan as a raw material appendage. By bills, we need miners to be licensed in Kazakhstan, that is, to form legal businesses and become full-fledged tax subjects. Mining pools are also becoming a component of the economy.
Bills connect the creation and circulation of digital assets in a single ecosystem. At the same time, the Ministry of Digital Development, Innovation, and Aerospace Industry will regulate and authorize the operations of miners and mining pools.”
Taxes for Crypto Miners
The new license regime will also include a new taxation mechanism for Kazakhstan's crypto miners. Beginning in 2024, crypto miners will be required to swap up to 75% of their capital on local crypto exchanges.
Currently, the government levies value-added taxes on the import of crypto mining equipment. They also intend to collect corporate income tax on the earnings of cryptocurrency miners. In addition, the mining pool income will be taxed.
Furthermore, almost 1 million Kazakhstanis currently trade on international exchange. The government intends to put all of them on local exchanges.
Smyshlyaeva noted, “We make all cryptocurrency transactions transparent by moving them to Kazakhstani exchanges. Crypto exchanges are subject to financial surveillance and, according to the project, will be connected with the State Revenue Committee's information systems. The implementation of a mining equipment register will prevent the installation of illegal data centers, and licensing will ultimately address the problem of grey miners, ensuring the security and balance of the energy system.”