Kazakhstan’s Digital Development Minister Bagdat Mussin recently said that the country is in talks to bring investments worth 300 billion tenge (approx. $714 million). The investments will be for cryptocurrency mining projects.
The country is already a mining powerhouse
Kazakhstan is currently the home of 6% of the world’s crypto mining. In June, it passed some legal amendments that clarified regulations and taxation of digital currency mining. The authorities are trying to leverage its oil-dominated economy which can offer cheaper electricity to power-hungry businesses. Cryptocurrency mining is power intensive and cheap electric supply that is essential for miners to increase their profits.
The Central Asian country has thirteen mining farms already and four others are under construction. Mussin said in a government meeting,
“More than 80 billion tenge ($190 million) has been invested in the sector… Today we have preliminary agreements on attracting investments worth 300 billion tenge.”
Kazakh law supports digital currencies
The Kazakh law allows mining of asset-backed cryptocurrencies but doesn’t allow the mining of unsecured ones like Bitcoin. The authorities established crypto tax regulations in 2019 to support the digital currency environment flourish. The tax regulations render crypto mining earnings tax-free as long as the miners do not convert the coins into fiat money.
The law also suggests that Kazakh mining firms have to pay taxes similar to that of data centers if they were using their hardware to provide crypto mining services to other parties.
Kazakhstan also has one of the largest crypto mining facilities in the world. The facility is located near the Russian border at Ekibastuz. According to its sales director Dmitry Ivanon, it can cost up to 50,000 mining rigs. At full capacity with ether MicroBT’s WhatsMiner M30 or the Bitmain AntMiner S19, the mining power would be around 5-6 EH/s which could total up to 4% of the current hashrate of Bitcoin.
Enegix is operating two mining facilities of which the Ekibastuz is its largest operation employing 160 people. The facility needs as much electricity as is consumed by 180,000 homes in the US.