Uzbekistan Goes Solar for Crypto, Kazakhstan Cuts Back Mining
2022.05.06 19:41
Uzbekistan Goes Solar for Crypto, Kazakhstan Cuts Back Mining
- Uzbekistan introduces a tax-free, solar-powered solution for crypto miners.
- Firms to pay double to use regular energy for mining.
- Kazakhstan tightens its grip on the crypto industry with strict rules and regulations.
According to a presidential directive issued this week, Uzbekistan seeks to lure cryptocurrency miners away from coal by allowing the use of solar power inside the strictly regulated local sector. The government thinks charging miners a premium amount for electricity obtained from the main grid would speed their move towards solar energy.
Additionally, the Central Asian country will waive income tax for both international and domestic crypto firms. Despite major power disruptions earlier this year, Uzbekistan hopes to stimulate growth in its indigenous crypto mining industry by making drastic changes.
Sources say that local miners will have to pay double the price for electricity drawn from the regular energy system as a requirement. They may also incur additional fees if they mine during peak hours.
Given the lack of official regulation, crypto mining operations across the nation must register with the new Uzbek National Agency for Prospective Projects. Uzbekistan authorized cryptocurrency trading in 2018, but there is presently just one approved exchange – this is where local crypto miners trade the digital assets they earn.
The new regulatory framework would force cryptocurrency exchanges to conduct know-your-customer (KYC) checks on cryptocurrency dealers and preserve data for five years.
Meanwhile, the new solar incentives will provide enough regulatory leeway to spur growth in the local industry. Indeed, the administration in Tashkent expects that the country’s crypto sector would construct and run its solar panels, relieving strain on the country’s ailing energy infrastructure.
In terms of bitcoin mining, Uzbekistan is currently lagging behind Kazakhstan.
The move to solar comes in response to power outages in Kazakhstan and neighboring Kyrgyzstan earlier this year, following a mass exodus of bitcoin miners from China to Kazakhstan following Beijing’s blanket ban in June.
Kazakhstan’s energy system, which also serves Uzbekistan and Kyrgzstan’s business and residential sectors, was severely harmed. The disrupted supply of electricity, heat, and gas led officials to blame crypto miners for the surge in energy use. Kazakhstan has now modified cryptocurrency mining rules by requiring miners to submit quarterly reports.
The registration and reporting requirements for those minting digital currencies have been extended by an order issued by Kazakhstan’s minister of digital development, Bagdat Musin. Individual entrepreneurs and legal firms intending to mine cryptocurrency must inform officials at least 30 days before beginning operations, according to the paper. The same goes for businesses and people who provide services to them.
Cryptocurrency miners are required to submit information like their company’s name, registration number, contact information, bank account information, and IP addresses. They must also detail their mining facilities’ energy requirements, projected investments, and staff numbers.
Kazakhstan’s government has updated the registration criteria for crypto mining individuals and businesses. The new rules come as a crackdown on the mining sector, where an influx of miners has been blamed for power outages.
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