Kazakhstan Generates $7M in Taxes From Crypto Miners
- Kazakhstan has generated 3.07 billion tenge ($7 million) in taxes paid by the crypto miners operating in the Central Asian country.
- Preliminary data for 2023 shows that the total fees collected by the government as of April 27 amount to 240 million tenge.
- Data also confirms that Kazakhstan contributes over 13.22% of the total Bitcoin hash rate, just after China and the US.
- On January 1, 2022, Kazakhstan confirmed that crypto miners in the country will be taxed according to their electrical consumption.
Crypto mining has become as popular as ever following the 2021 crypto market bull run due to the increase in popularity as well as the price of the cryptocurrencies. Interestingly, the crackdown on crypto mining initiated by China in 2021 resulted in crypto miners in the nation leaving in search of other hubs and finding safe haven in Kazakhstan and the United States. The world’s largest landlocked country has generated 3.07 billion tenge (approximately $7 million) in taxes paid by the miners operating in the Central Asian country.
According to reports from local media outlets, this generation of revenue can be attributed to the recent amendment of the laws governing crypto mining operations in Kazakhstan. The country was earlier known for its low rates of electricity and minute taxes on crypto mining. However, due to severe electrical outages across the country, laws regarding the mining of digital assets were changed.
Furthermore, the preliminary data from the government for 2023 shows that the total fees collected by the government as of April 27 amount to 240 million tenge, or approximately $541,000. However, this is much smaller compared to the 652 million tenge (around $1.5 million) in fees paid in the first quarter of 2022. Additionally, the government shut down a large group of miners to “ensure energy security” last year.
More importantly, the data from the Cambridge Center for Alternative Finance confirms that Kazakhstan contributes over 13.22% of the total Bitcoin hash rate, being just behind the United States (37.84%) and China (21.11%). The country saw a huge accumulation of crypto miners over the years due to crypto-friendly laws and cheaper electricity rates.
As stated above, the crackdown on crypto miners in China led to many companies ending their operations or moving to other countries like the US and Kazakhstan. Interestingly, some estimations claim that as many as 87,849 mining rigs came to the country following the crackdown.
On January 1, 2022, Kazakhstan confirmed that crypto miners in the country will be taxed according to their electrical consumption. This law came amid rising concerns about the undertaxation of crypto miners in the county, who used the nation’s power grids to a very high extent but whose taxes were not very high.
It is also important to mention here that the government of Kazakhstan announced plans to introduce new crypto regulations to curb tax fraud and unlawful business operations in the region. Moreover, as reported earlier by Bitnation, the authorities have decided to build the country’s central bank digital currency, or CBDC, on BNB Chain, the native blockchain of the world’s largest crypto exchange, Binance.
Last year, Binance also signed a memorandum of understanding (MoU) with the Republic of Kazakhstan’s Financial Monitoring Agency, under its “Global Law Enforcement Training Program.” The two parties also agreed on closely observing whether notorious wrongdoers use digital assets in their illicit activities, including money laundering and terrorist financing. If detected, such tokens will be blocked by the exchange and the regulators in the region.
“Kazakhstan has shown itself to be a pioneer in Central Asia crypto adoption and regulation. This further signifies Binance’s commitment to being a compliance-first exchange and providing products and services in a safe and well regulated environment across the globe,” recently said the founder and CEO of Binance, Changpeng Zhao.
A crypto journalist with over 3 years of experience in DeFi, NFT, metaverse, etc. Parth has worked with major media outlets in the crypto and finance world and has gained experience and expertise in crypto culture after surviving bear and bull markets over the years.
