Kazakhstan will restrict crypto miners due to power outages

Producing most of its energy with coal, Samruk Energy, Kazakhstan’s national grid operator, is reviewing the electricity distributed to the country’s largest consumers. Managers are expected to impose limitations, possibly by targeting crypto currency mining farms. Faced with a sudden energy shortage, authorities regret their recent support of the crypto industry.

The Kazakh parliament passed a law in 2020 legalizing crypto mining and creating favourable conditions for the industry. The bill introduced the concept of a “digital asset” and laid the groundwork for licensed crypto currency brokers to set up shop. The legislation also sets rates for taxes to be levied on miners and for new and increased electricity tariffs starting next January.

Speaking shortly after the bill passed, Bağdat Musin, Minister of Digital Development, said that 13 mining farms started operating in Kazakhstan with a total investment of 188 million dollars. He stated that mining investments will reach 1.2 billion dollars by 2025.

When China banned the use and mining of crypto currency on its territory this summer, many crypto currency miners moved their operations across the border, making Kazakhstan the second largest crypto miner in the world. The country’s share of global mining increased from 1.4 percent in September 2019 to over 18 percent, according to data collected by the University of Cambridge.

As of October, Kazakhstan rose to the second place in the world after the USA with a share of 18.1 percent in Bitcoin mining. In the crypto money production ranking, the USA ranked first with a share of 35.4%, and Russia was the third with a share of 11.2%. (www. eurasianet.org)