Kazakhstan, a major player in the world of Bitcoin mining, has taken steps to regulate the crypto industry with the aim of reducing tax fraud and illegal business practices. President Kassym-Jomart Tokayev signed two new laws on Feb. 6 that enforce the nation’s stance on illegal mining operations and the issuance of digital assets.
The first law mandates that digital asset issuers must have government approval. It also mandates that they must be subject to monitoring under the “On Combating the Legalization of Proceeds from Crime and the Financing of Terrorism.” This law takes effect on Apr. 1st, 2023.
Reducing The Possibility Of Tax Evasion
The second legislation addresses unsecured digital assets earned through mining operations. To curb tax evasion, crypto miners in Kazakhstan must sell at least 75% of their revenue through registered crypto exchanges. This rule, aimed at collecting “income information for tax purposes,” will be in effect from Jan. 1, 2024, to Jan. 1, 2025.
Moreover, all mining licenses in Kazakhstan are limited to three years and vary based on the miner’s ownership of the facilities. Kazakhstan also launched its central bank digital currency project, the “digital tenge,” in conjunction with the new regulations.
The National Bank of Kazakhstan and Binance, a crypto exchange, jointly published a report. The report outlines the bank’s vision for collaboration between traditional finance and DeFi.
The report by the National Bank of Kazakhstan and Binance noted that the bank had started a research and development project. The project aims to explore how its CBDC can bridge the gap between crypto and traditional fiat payment systems.
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Additionally, the Astana Financial Services Authority granted Binance a permanent license in October 2022. The license allows Binance to manage a digital asset platform and provide custody services.
However, Kazakhstan is positioning itself as a leader in the world of crypto and digital assets with new regulations and the launch of its CBDC. These developments demonstrate Kazakhstan’s commitment to the rapidly evolving crypto space.