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Crypto Mining: Kazakhstan Collects $1.5 Million in Bitcoin Miner Fees

Crypto Mining: Kazakhstan Collects $1.5 Million in Bitcoin Miner Fees

Crypto mining is proving to be one of the important lifelines of Kazakhstan.

According to a document released Tuesday by the State Committee on Revenue of the Kazakhstan Ministry of Finance, Bitcoin mining revenue came from 12 different regions of the country.

This generated a substantial amount of revenue for the government in the first quarter of the current year alone.

In a government report, the Kazakhstan government collected around $1.5 million in fees from crypto mining companies.

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bitcoin mining money

Despite fierce opposition to a new crypto mining tax policy implemented in April, an internet blackout, and carbon-intensive energy infrastructure, the Kazakhstan government has continued to profit from crypto mining activity.

Kazakhstan accounts for 13.3% of the global hash rate (Council of Europe).

Following the closure of several mining companies across the country, government revenue fell well below previous forecasts.

Aset Nauryzbayev, an economist and former KEGOC board chairman, told the rest of the world in March 2017:

“It is a slip of the tongue on the part of the Ministry of Energy, which failed to anticipate the problems of the electrical engineering sector and establish new capacities.”

Kazakhstan Welcomes Crypto

At the end of 2019, when the value of Bitcoin fell, the Kazakh crypto market was opened. Miners’ businesses have been boosted, despite the cryptocurrency not being recognized as legal tender.

In his 2020 State of the Nation address, Kazakhstan President Kassym-Jomart Tokayev challenged the country to generate $1.2 billion in crypto investments over the next five years.

Attracted by cheap electricity and a lack of regulation, the cryptocurrency business began to grow in Kazakhstan.

In a report from the state revenue panel, which breaks down fees by location, the fee collected in the first three months of this year is based on the actual amount of electrical energy used to carry out mining activities.

Total crypto market capitalization at $1.26 trillion on the daily chart | Source: TradingView.com

Crypto miners have to pay fees

To help with network security, which is a computationally complicated and energy-intensive procedure, miners are compensated with new coins.

Under the law adopted by the country, miners are required to pay part of their energy costs to the government. On the 20th day of the last month of each quarter, miners must pay $0.0024 per kilowatt. Parliament is currently discussing this tax, as noted by the CBC.

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Kazakhstan is home to a disproportionate share of the mining industry, even though mining still consumes a negligible amount of the world’s total energy.

The country has a population of just 19 million, but accounts for 13.3% of the global hash rate, according to the latest data, making it the third largest Bitcoin mining hotspot in the world.

Featured image from Yahoo News Singapore, chart from TradingView.com

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