The legislation seeks to establish clearer guidelines for mining, taxes and licensing for service providers such as exchanges in the region.
Kazakhstan plans to release a legal framework for the regulation of bitcoin and cryptocurrencies, per a report from Russian media outlet Tass.
“Deputies of the Majilis of the Parliament have developed a sectoral bill on digital assets of the Republic of Kazakhstan and four related bills as a legislative initiative,” said Ekaterina Smyshlyaeva, a member of the Committee on Economic Reform and Regional Development of the Mazhilis.
The initiative is being developed as a result of the region’s lack of framework as it relates to bitcoin and cryptocurrency mining, per the report. Additionally, Smyshlyaeva said that part of the draft bills are focused on the “production and circulation of secured and unsecured digital assets.”
Specifically, the region is looking to establish guidelines for the consumption of electricity as it relates to mining digital assets. The framework would give the Ministry of Energy directorial authority to provide quotas based on volume depending on the needs of the electric grid.
“The bills also make it possible to open additional opportunities to attract investments for the construction of new generations in fields and renewable energy sources,” Smyshlyaeva explained.
The framework also seeks to establish guidelines on the growing number of exchanges popping up in Kazakhstan and their relationship with miners.
“Support for their activities will be carried out through the introduction of a mandatory requirement for miners to exchange up to 75% of their capital on domestic crypto exchanges starting from 2024,” said Smyshlyaeva.
Additionally, the legislation seeks to establish further tax regulations.
The report states “it is planned to charge the republican budget corporate income tax on miners’ remuneration, mining pool income tax, payment on operations on crypto exchanges.”
Additionally, the legislation seeks to regulate mining pools and cloud services which utilizes the raw materials of the region by requiring stricter licensing expectations for would-be service providers.
“It will allow you to reorient the interest of investors from raw material potential to the turnover of digital mining products,” Smyshlyaeva said.
Smyshlyaeva went on to explain that the legislation is Kazakhstan’s first step in establishing a full-fledged bitcoin and cryptocurrency ecosystem.