According to Kazakhstan’s mining organization, authorized crypto mining companies have already taken a third of their currency minting hardware out of the country. The announcement comes as a result of electricity shortages and impending tax hikes, which are driving miners out from Central Asia.
Bitcoin miners have begun to remove their equipment from Kazakhstan.
Companies who are lawfully operating mining facilities in Kazakhstan have already transferred roughly 30% of their equipment. Alan Dorjiyev, President of Kazakhstan’s National Association of Blockchain and Data Centre Industry, told Forklog about the transfer.
Miners have been impacted by ongoing energy supply concerns as well as an impending tax increase, according to the CEO. His group represents large enterprises active in the extraction of digital currencies, which account for 70% of Kazakhstan’s cryptocurrency mining industry.
According to the article, Kazakhstan’s parliament is preparing to levy a tax on miners of 10 tenge (about $0.02) per kilowatt-hour (kWh) of power generated from indigenous energy resources and 5 tenge per kWh for imported electrical energy.
If lawmakers pass the proposed modifications, the charge on electricity generated from natural gas and renewable sources, excluding hydropower, will be 3 tenge per kWh. Authorities in Nur-Sultan imposed a 1 tenge ($0.0023 at the time) tax per kWh of power used to mint cryptocurrency in 2021.
Following China’s decision to initiate a nationwide crackdown on the mining industry in May, Kazakhstan became a mining hotspot, thanks to its controlled electricity costs. Mining corporations were initially welcomed in the country, but their energy-intensive operations have since been blamed for the country’s growing power shortage.
In order to address the shortages, the authorities increased electricity imports from Russia and shut down legitimate mining farms during the winter outages. The Ministry of Energy, the Financial Monitoring Agency, and law enforcement have all gone after unlicensed miners on President Kassym-Jomart Tokayev’s orders.
Dorjiyev went on to say that the country is slowly turning into a “unfavourable jurisdiction for the crypto mining business.” He also cautioned that Kazakhstan would lose its dominant position in the bitcoin network in terms of processing power. The country’s contribution of worldwide hashrate had reached 18 percent as of August 2021, second only to the United States.
Tokayev’s administration temporarily halted banks and restricted internet access in early January to quiet protests over rising fuel prices. The measures had an impact on the mining industry as well. Some mining corporations have already relocated to other countries, such as the United States, due to political unrest and power outages.
Disclaimer: These are the writer’s opinions and should not be considered investment advice. Readers should do their own research.