Ministry of Energy of Kazakhstan proposes to limit cryptocurrency mining

According to a bill prepared by the Ministry of Energy, the total capacity of mining facilities operating in Kazakhstan is to be limited by 100 MW. Each facility may not consume more than 1 MW.

In addition, the authorities of Kazakhstan impose extra electricity rates for miners who will pay 1 tenge more for each kilowatt, starting from January 2022.

Alan Dordzhiev, Head of the Association of Blockchain and Data Centers of Kazakhstan, commented on the bill. He believes that “any limitation is not very good,” but the reasons for their introduction are crystal clear.

Kazakhstan sees a boost of the so-called “gray” mining – home, industrial and other non-core facilities are used for crypto transactions, which causes electricity supply shortages at certain times.

“Mining-wise, we have definitely become a crypto power, but a different question arises now: how to regulate the industry so that only “white” miners remain, with all the gray ones being cut-off,” Dordzhiev said. He added that “it was necessary to build a nuclear power plant in Kazakhstan long ago”, this would have made up for the energy deficit in a relatively environmentally friendly way. In Kazakhstan, nuclear power plants are “the only carbon-free solution,” says Dordzhiev.

Mining in Kazakhstan began to boost this year amid tightening restrictions in China. According to the University of Cambridge, the Central Asian country became the third largest cryptocurrency producer in the world this spring.

After China actually banned the circulation of cryptoassets, Kazakhstan, with its 18.1% of global mining capacity, took the second place after the United States. The main reasons were the short distance to the location, the relative affordability of electricity, and the cool climate reducing the need for cooling systems.

Source: spot.uz and forbes.kz

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