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Law of Kazakhstan Limiting Electricity Consumption of Crypto Miners Comes into Force – Mining Bitcoin News

A new law has come into force in Kazakhstan, expanding the regulatory framework for cryptocurrency miners while restricting their access to low-cost electricity. The legislation introduces a mining licensing system with two different categories of licenses that companies must periodically renew.

President Tokayev praises law regulating crypto-assets mining and exchanges in Kazakhstan

The Law “On Digital Assets in the Republic of Kazakhstan” signed by President Kassym-Jomart Tokayev on Monday has come into force. The main purpose of the new legislation, passed along with amendments to other legal acts such as the Tax Code, is to regulate activities related to the issuance and circulation of these assets, especially mining.

The changes also aim to create conditions for the development of the crypto industry and fair competition among market participants, local media reported. The Digital Assets Act, passed by Parliament at the end of January, defines the powers of state bodies that oversee the sector and introduces licenses for crypto miners and exchanges, replacing the current registration system.

Mining licenses are granted to two groups of applicants for a period of three years. Companies that own mining infrastructure, such as B. Data centers that meet certain standards in terms of equipment, location and security fall into the first category. The second is for those who own mining hardware but rent space in crypto farms and do not directly apply for an energy quota.

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.

Additionally, crypto miners are only allowed to source electricity from the national grid when there is a surplus and exclusively from the state-controlled, centralized exchange KOREM. However, upper price limits for this energy will be lifted and trading will be carried out according to free market principles.

Cheap, subsidized electricity was one of the factors that attracted mining companies to Kazakhstan after China’s crackdown on the industry in 2021. Authorities in the Central Asian nation have blamed the growing power deficit on the influx of miners and have taken measures to curb consumption in Kazakhstan, including temporarily shutting down registered facilities and closing illegal farming operations. On January 1st, a higher electricity surcharge was imposed on authorized miners.

Do you think the stricter regulations and increased costs threaten Kazakhstan’s status as a mining destination? Do share your thoughts on this topic in the comments section below.

Law of Kazakhstan Limiting Electricity Consumption of Crypto Miners Comes into Force – Mining Bitcoin News, Crypto Trading News

Lubomir Tasev

Lubomir Tassev is a journalist from tech-savvy Eastern Europe who likes Hitchen’s quote: “Being a writer is what I am, not what I do.” Besides Crypto, Blockchain and fintech, international politics and business are two other sources of inspiration.

photo credit: Shutterstock, Pixabay, WikiCommons

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Source: Crypto News Deutsch

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