The Senate of Kazakhstan’s parliament passed a bill establishing an additional electricity levy for miners. The document is currently with President Kassym-Jomart Tokayev for signature.
“Public opinion and the views of industry representatives were not taken into account, and the additional tax burden has been introduced,” ForkLog said in the local “Association of Blockchain and Data-Center Industry”.
The document provides for an additional charge of 1 tenge per kilowatt-hour of electricity consumed in cryptocurrency mining. The new rules are due to take effect on January 1, 2022.
Such a move by the Kazakh authorities explained as an attempt to ‘bring miners out of the shadows’ from the ‘gray zone’.
In an interview with ForkLog, experts said that such a decision could pose a hurdle for Chinese mining companies, which are actively seeking other jurisdictions in light of the tougher rhetoric from local authorities toward the crypto industry. One of the countries they have turned their attention to is Kazakhstan.
Even with parliamentary approval of the bill, interest from Chinese miners in Kazakhstan continues to grow, said representatives from data-center Enegix:
“A very large volume of inquiries about the possibility of locating equipment and the construction of facilities.”
Enegix said that representatives of Chinese companies have already “visited sites where construction is planned, and some approvals are in process.” He added that investment agreements are expected to be signed in the near future.
Enegix signed an agreement with Wattum Management to build a 16 MW data center in Karaganda Region. In the future, a 50 MW additional facility is planned.
The introduction of the mining levy in Kazakhstan should not significantly affect market development, said Enegix:
“In essence, the market did not react to this at all. Especially when compared with the flood of inquiries from China. According to our calculations, this does not change the profitability of this activity. The fact that the state wants to introduce a tax suggests it intends to generate revenue from this sector, rather than prohibit it.”
As noted in May, manufacturers of mining equipment from the PRC shifted their supply emphasis to Central Asia and North America due to harsh statements by authorities regarding cryptocurrencies.
In June, in the provinces Yunnan, Qinghai, Xinjiang and Sichuan, mining operations were restricted. Chinese financial institutions were banned from participating in cryptocurrency transactions.
Representatives of mining company Foundry said that about 70% of Chinese cryptocurrency mining firms have already turned off their equipment, and by June 30 their share will approximate 90%.
Against the backdrop of growing pressure from authorities in China, BIT Mining Limited said it was accelerating its overseas expansion and reported the delivery of the first batch of miners to Kazakhstan.
The Chinese mining equipment maker Canaan Creative launched its first own Bitcoin mining operation in Kazakhstan.
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