On the afternoon of June 18, a document circulating on the Internet showed that the Sichuan Provincial Development and Reform Commission and Energy Bureau issued a notice to clean up and shut down virtual currency “mining” projects. Previously, the four provinces of Inner Mongolia, Xinjiang, Qinghai, and Yunnan have introduced a cleanup and reform policy for virtual currency mining, making Sichuan the last of China’s major bitcoin mining provinces to land a regulatory policy.
No one expected the “de-Chineseization of mining” that bitcoin communities overseas have been shouting about in recent years to come so quickly. China, once the world’s top-ranked country in terms of bitcoin computing power, is set to withdraw from the mining scene. In its place will be North America, where compliance is stronger and capital is more powerful, and Central Asia, where power costs are lower and policy is clearer.
A few days ago, a Kazakh, Arman Batayev, reached out to me via private message on Twitter. From him, I learned more about Kazakhstan’s connection to mining.
For mining, Kazakhstan has created a new region
Arman told me that he represents Astana International Financial Center (AIFC) and is the deputy director of the investment department.
AIFC is a special zone set aside in Kazakhstan that enables independent regulation and is a friendly ecology created by the country to attract foreign investment. Miners registered through AIFC (http://digitalresident.kz) can enjoy protection of local laws and cheap electricity. Currently, large companies such as Bitfury, Powerry and minbest are registered with the AIFC.
Since its establishment in 2017, AIFC has become a center of attraction for cryptocurrency mining companies.
A new generation of mining centers Kazakhstan “raised”
Kazakhstan has a typical continental climate, characterized by mostly cold and windy weather, which Arman says is one of the important prerequisites for establishing data centers and mining sites. In addition, there is plenty of cheap electricity in the north, northwest and central regions of Kazakhstan, all of which provide important support for mining.
In 2020, Kazakhstan officially recognized Bitcoin as a digital asset that can be traded like any other commodity. Cryptocurrency exchanges are also allowed here under the AIFC’s FinTech regulatory rules, subject to compliance.
At this stage, Kazakhstan’s Ministry of Digital Development is working with the AIFC and the Blockchain Association to draft cryptocurrency industry and blockchain technology regulations, which also involve a growing number of professionals. At the same time, the Central Bank of Kazakhstan is planning to pilot a central bank digital currency.
In response to bitcoin mining activities, the AIFC has established an IT park where data centers are not required to pay any taxes, except for a 1% annual “usage fee” for running water.
In addition, as more and more mining sites choose to locate in Kazakhstan, the country intends to change its tax laws and plans to charge a digital mining tax at the rate of 1 tenge ($0.00232) per kilowatt hour starting in 2022.
“The introduction of the new tax law is another step towards the legalization of cryptocurrency mining and data centers as an important source of revenue for the country.”
- share of clean energy
Kazakhstan has 116 power facilities producing renewable energy with a capacity of 1,685 MW, producing 3% of the total electricity produced. With no need for electricity transportation or storage, most of the electricity consumption comes from the mining industry. Experienced contractors can help miners set up hosted mines in 3-4 weeks.
According to the Paris Agreement, Kazakhstan is expected to achieve half of its total consumption of renewable and alternative energy sources by 2050, Arman said. And 20 percent of all energy is currently natural gas, which wants to be cleaner for coal.
Shifting positions or waiting in place? Where do Chinese miners go from here?
Faced with domestic regulatory policies, Chinese miners are starting to look for a new way out. However, for small and medium-sized miners, Arman gives his own advice: 1. work with AIFC-invested joint ventures; 2. send the miners to Kazakhstan for hosting.
Going forward, Arman believes North America will become the largest center for bitcoin mining, with a concentration of computing power migrating to cryptocurrency-friendly states like Texas and Wyoming. Meanwhile, Kazakhstan, with its own unique conditions and lenient and favorable policies, will also be a significant contributor to bitcoin computing power.
Are you ready for a new arithmetic landscape?
Posted by:CoinYuppie，Reprinted with attribution to:https://coinyuppie.com/for-bitcoin-mining-kazakhstan-creates-a-new-area/
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