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Kazakhstan Law Limiting Crypto Miners’ Consumption of Electricity Takes Effect – Mining Bitcoin News
A new law that expands the regulatory framework for cryptocurrency miners while limiting their access to low-cost electricity has gone into effect in Kazakhstan. The legislation introduces a licensing regime for mining with two different categories of licences, which the companies must renew at regular intervals.
President Tokayev signs law regulating mining and exchange of cryptoassets in Kazakhstan
The law “On Digital Assets in the Republic of Kazakhstan”, signed by President Kassym-Jomart Tokayev on Monday, has entered into force. The main purpose of the new legislation, approved together with amendments to other legal acts such as the Tax Act, is to regulate activities related to the issuance and circulation of these assets, in particular mining.
The changes are also aimed at creating conditions for the development of the crypto industry and fair competition between market players, local media reported. The Digital Assets Act, passed by parliament in late January, defines the powers of government bodies overseeing the sector and introduces licensing for crypto miners and exchanges, replacing the current registration system.
Mining licenses will be issued for a period of three years to two groups of applicants. Entities that own mining infrastructure, such as data centers that meet certain standards in terms of equipment, location and security, fall under the first category. The second is for those who own hardware for mining, but who rent space in crypto farms and do not apply for an energy quota directly.
A separate set of requirements has been introduced for mining pools. They must have their hardware and software installed in Kazakhstan and comply with the country’s information security rules and other applicable regulations.
Furthermore, crypto miners will be allowed to buy electricity from the national grid only if there is a surplus and exclusively from the state-controlled, centralized exchange KOREM. However, price caps for this energy will be removed and trading will be based on market principles.
Cheap, subsidized power was one of the factors that drew mining companies to Kazakhstan after China’s crackdown on the industry in 2021. Authorities in the central Asian nation have blamed the growing electricity deficit on the influx of miners and taken steps to limit consumption in the sector, including temporary shutdowns of registered facilities and closure of illegal farms. On January 1, a higher electricity surcharge was imposed for authorized miners.
Do you think the stricter regulations and increased costs threaten Kazakhstan’s status as a mining destination? Share your thoughts on the topic in the comments section below.
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