David - Cryptocurrency Enthusiast
Kazakhstan, one of the world's largest Bitcoin mining capitals, has recently signed a new law that aims to reduce tax fraud and unlawful business operations in the crypto industry. The law, signed by President Kassym Jomart Tokayev on February 6, 2023, seeks to restore the nation's stance against the unauthorized issuance and mining of crypto assets.
Out of the two pieces of legislation, the first requires secure digital asset issuers to obtain permission from the government. These issuers will also be monitored under the existing law "On Combating the Legalization (Laundering) of Proceeds from Crime and the Financing of Terrorism." This law will take effect on April 1st 2023.
The second legislation focuses on unsecured digital assets, which are often generated through crypto mining operations. To minimize the risk of tax evasion, crypto miners in Kazakhstan will be required to sell at least 75% of their revenue through registered cryptocurrency exchanges. This rule, which aims to gather "information on the income of digital miners and digital mining pools for tax purposes," will be implemented from January 1st 2024 to January 1st 2025.
It's worth mentioning that all crypto mining licenses in Kazakhstan are issued for a limited period of three years and may vary depending on whether the miner owns the mining facilities.
Alongside the introduction of the new laws, Kazakhstan has launched the pilot of its central bank digital currency (CBDC) project, the "digital tenge." In a joint report by the National Bank of Kazakhstan (NBK) and cryptocurrency exchange Binance, NBK deputy governor Berik Sholpankupov expressed the bank's vision of "collaborating between traditional finance and DeFi." He added, "In Kazakhstan, we have started a practical R&D project to explore how our CBDC – Digital Tenge – can bridge the world of crypto with traditional fiat payments infrastructure."
It's worth mentioning that in October 2022, the Astana Financial Services Authority granted Binance a permanent license to operate a digital asset platform and provide custody services.
The newly signed law by Kazakh President Kassym Jomart Tokayev aims to promote a secure and trustworthy environment for crypto asset transactions in the country. This includes creating opportunities for the citizens to buy and sell Bitcoin online with the assurance of both cheap cryptocurrency and trusted Bitcoin options. These regulations are a crucial step towards establishing Kazakhstan as a reputable hub for crypto asset management, where users could confidently engage in cryptocurrency exchange activities.