China last year imposed a nationwide ban on any type of cryptocurrency trading, mining, or advertisement. The South Asian economy proceeded to blacklist the accounts of the cryptocurrency influencers in the country as well. After the ban, Bitcoin miners transferred to other potent locations to continue their businesses.
Kazakhstan was transformed into a prime location for Bitcoin miners. However, the government of Kazakhstan is introducing policies that are not in favor of the Bitcoin mining development industry. The state recently imposed heavy taxes on miners in the region. It means that when Bitcoin prices will go up eventually, the miners in Kazakhstan would have to pay higher taxes.
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Regulation of Crypto Mining Industry
Alibek Kuantyrov is the Minister of National Economy who recently claimed that the country is planning to introduce better taxation policies for digital currency miners. He further explained that the tax ratio can be linked to the mined tokens quantities.
Local media outlet ForkLog reported that taxing crypto miners will amend the economic development of the country. There are some other countries like El Salvador where the government has added Bitcoin as a legal tender and imposed flat 10% mining taxes. The government of Salvador is planning to use the tax income to build a crypto trade-free zone or Bitcoin city.
The government of Kazakhstan is introducing the type of policies that are not very encouraging for the crypto miners. After the China mining ban, the Kazakhstani government welcomed the crypto miners to set up their shops in the region. At first, many miners decided to set up their shops in the region due to cheap electricity rates.
However, after a while, the mining rates inflated by 10% increasing the incurred costs for miners. Denis Rusinovich the co-founder of a crypto mining organization called CMG recently claimed that Kazakhstan started as a haven for exiled miners and turned into a desert later on. His company is operating in the region since 2017 and he recently took to Twitter to criticize the policies of the Kazakhstani government.