Kazakhstan, one of the world’s biggest Bitcoin (BTC) mining hubs, announced plans to introduce new crypto regulations to reduce tax fraud and unlawful business operations.
A new law signed by Kazakh President Kassym-Jomart Tokayev on Feb. 6 reinstated the nation’s stand against the unlawful mining operations and issuance of crypto assets. Out of the two distinct pieces of legislation, the first requires the secured digital assets issuers to have the government’s permission.
Moreover, such issuers will be subject to monitoring by the existing law of the land — “On Combating the Legalization (Laundering) of Proceeds from Crime and the Financing of Terrorism.” The law will enter into force from April 1, 2023.
The second legislation targets unsecured digital assets, typically earned through crypto mining operations. To reduce the possibility of tax evasion, crypto miners in Kazakhstan will be forced to sell at least 75% of their revenue via registered crypto exchanges. This rule, which aims to collect “information on the income of digital miners and digital mining pools for tax purposes,” will be effective from Jan. 1, 2024, to Jan. 1, 2025.
All crypto mining licenses in Kazakhstan are issued for a limited period of three years and differ based on whether or not the miner owns the mining facilities.
Related: Kazakhstan among top 3 Bitcoin mining destinations after US and China
Alongside introducing the above laws, Kazakhstan launched the pilot of its central bank digital currency (CBDC) project — the “digital tenge.”
Alongside the National Bank of Kazakhstan, #Binance presented a bilateral report on the “State of the Digital Assets Industry and DeFi in Central Asia”.— Binance (@binance) February 3, 2023
The joint report provides an overview of crypto adoption, general trends of DeFi, and the local digital assets industry.
In a report jointly published by the National Bank of Kazakhstan (NBK) and crypto exchange Binance, NBK deputy governor Berik Sholpankupov wrote about the bank’s vision of a “collaboration between traditional finance and DeFi,” adding:
“In Kazakhstan, we also started a practical R&D project to explore how our CBDC – Digital Tenge, can bridge the world of crypto with traditional fiat payments infrastructure.”
Previously, in October 2022, Kazakhstan’s Astana Financial Services Authority granted Binance a permanent license to manage a digital asset platform and provide custody services.