Kazakhstan is one of the biggest cryptocurrency miners in the world. Recently, it has taken aggressive moves against the crypto industry. The government is working on a comprehensive tax structure for miners. On the other hand, Binance, the world’s largest cryptocurrency exchange, will help Kazakhstan establish digital asset legislation. The country seeks to expand its crypto sector beyond bitcoin (BTC) mining. Hence, Binance has inked an MOU with the government of Kazakhstan. They have collaborated to support “virtual asset market development” in the Central Asian country.
Kazakhstan approves cryptocurrency mining tax guidelines
The lower house of the Parliament of Kazakh- the Mejlis, passed revisions to the national tax code. It had put a tax burden on crypto mining in the first reading on May 25, 2022. These suggestions set graduated tax rates based on the electricity mines consumed. The government is also taking steps to limit energy consumption in the country. According to Kazakhstan government authorities, these measures aim to balance the load and de-stimulate private energy use.
On April 29, the country’s Minister of Digital Development issued an order requiring digital mining companies to disclose data on electricity usage and technical factors for grid connection 30 days before starting operations. Subsequently, 106 crypto mining firms were shut down in March after the Financial Monitoring Agency examined them. They have seized over 67,000 pieces of equipment.
Kazakhstan’s government may make it easier to adopt new crypto legislation. According to public policy experts in Kazakhstan, legislation relating to technology regulation, cryptocurrency, pharmaceutical pricing, tax increases, and China competition will have varying effects on cryptocurrency legislation and crypto mining regulations. Therefore, all crypto entities may face changes in the future.
The development of the digital assets business will involve defining regulations for this new asset class. Notably, it will include stablecoins, cryptocurrency products, institutional cryptocurrency ownership, and the possibility of a Central Bank Digital Currency (CBDC).
President of the Republic of Kazakhstan🇰🇿 Kassym-Jomart Tokayev meets CEO of Binance Changpeng Zhaohttps://t.co/K4MsXM646M— CZ 🔶 Binance (@cz_binance) May 25, 2022
Binance will provide cryptocurrency strategy advice to Kazakhstan
Binance will undertake to integrate financial infrastructure into the cryptocurrency market. According to a statement on its official blog, it will also assist with the country’s blockchain strategy. The corporation will temporarily be present in Astana, Kazakhstan’s capital. The exchange will work with the country’s digital government to develop the IT park Astana Hub into a regional blockchain center, according to Binance’s official release.
Kazakhstan is home to one of the world’s most extensive bitcoin mining operations but the country’s mining business has struggled due to electricity shortages. Beyond mining, the government has made steps to grow the crypto and blockchain economy. It includes recruiting new companies to Astana’s financial center- the Astana International Financial Centre (AIFC).
In March, Kazakhstan’s central bank said that legislation was changed to allow banks to provide services to crypto exchanges established in the AIFC. Binance’s advisory role is a significant step forward for the company criticized by regulators worldwide last year. Since the regulation blackout, the corporation has beefed up its compliance team and attempted to satisfy their concerns.
Overall, Kazakhstan’s Bitcoin mining boom appears unstable as the flood of miners puts pressure on the country’s energy supply. It has prompted the government to restrict miners’ access to electricity. So, the government declared earlier this month that all Bitcoin miners would be compelled to submit detailed data on their electricity consumption.