Kazakhstan Boosts Crypto Mining

Kazakhstan is making a bold move in the crypto mining sector. Effective January 1, 2024, miners will see a dramatic reduction in electricity charges, down to a fixed rate of just 2 tenge per kilowatt-hour (kWh), a significant cut from the previous 26 tenge. This change follows a six-month dialogue between the Kazakhstan Association of Blockchain Technologies and Data Centres and government officials, aiming to revitalize the mining industry, according to Bits.media.

The new legislation, signed by President Kasym-Jomart Tokayev on December 12, 2023, also benefits miners with their own power generation, reducing their rate to 1 tenge per kWh from the former 10 tenge. Cryptocurrency exchanges based in Kazakhstan receive an additional boost, being exempted from value-added tax (VAT) on digital asset transactions. This exemption is expected to heighten their global market competitiveness.

Dauren Karashev, head of the Kazakhstan Blockchain Technology Association, emphasizes the ongoing efforts to enhance the transparency and legal framework of the country’s crypto industry. The Association’s goal is to identify and amend laws that are impeding industry growth.

Kazakhstan’s government reaped approximately 3.07 billion tenge (around $7 million) in taxes from miners in 2022. In October, local crypto mining companies urged the president to lower taxes, warning that without governmental intervention, mining in Kazakhstan might face extinction. This new tax and electricity rate reduction represent a significant step towards sustaining and expanding Kazakhstan’s position in the global crypto mining landscape.