Kazakhstan Lifts Restrictions on Legal Miners

The Kazakhstan Association of Blockchain Technology discussed issues of electricity supply for persons engaged in digital mining activities. The meeting was held in the Ministry of Energy, and it was also attended by representatives of the Blockchain Association and the data-centers and technology industry, the Ministry of Digital Development, Innovations and Aerospace Industry of the Republic of Kazakhstan, and KEGOC JSC.

Participants of the meeting have received a proposal from the Ministry of Energy to identify “grey” miners who are not registered in the national register to confirm the legal status of their business activity. In addition, it has been discussed amendments and additions to regulatory legal acts concerning the establishment of requirements and criteria for persons engaged in digital mining activities have. The proposed measures will allow tracking of the activities of non-authorized miners throughout Kazakhstan. They will lead to the mandatory registration of “grey” miners.

“So-called grey miners are, in general, those who hide electricity consumption in digital mining behind another main activity. Most of all, these firms are located in those points where electricity consumption is unforeseeable, for example, in the Southern regions of Kazakhstan. Indisputably, it must be combated with such grey miners only through joint efforts of state authorities and associations; in this way, we will be able to achieve the results”, said Alan Dordzhiyev, the Chairman of the Association of Blockchain and Industry of a data centers and technologies.

The remarkable thing is that an offered proposal to stabilize the mining market does not imply restrictions and disconnections from the electric energy of mining farms that comply with the requirements of the law. However, miner data centers should carry out their activities without compromising the country’s energy security. 

“Taking into consideration the high potential of a blockchain industry, for its further development, it is necessary to join an effort to collaborate and search for a decision in unified elector energy system supply,” underlined Magzum Mirzagaliyev, head of the Ministry of Energy.

During the meeting, the heads of associations announced that they would consider the necessity to purchase not only domestic but also imported electricity. In addition, the idea of investing in the creation of new energy capacities including renewable sources has been put forward. 

As a result of the meeting, participants have signed the General Minutes. The documents include general arrangements of all parties, as follows:

• to prevent the restriction of electricity to the population, social facilities, and “white” miners in the event of a shortage of electric energy and power in the Unified Electric Power System of the Republic of Kazakhstan;
• to increase on the legislative level, the consideration term and adoption of an act concerning the launch of balance market (demand-response);
• to attract investments for “White” miners in developing new large projects of renewable energy resources (RES) through Accounting and Finance center and to assure electricity power purchase through them.

Furthermore, participants announced concerning the readiness of joint work in the stabilization of the electricity market and also about the creation of favorable conditions for digital mining development as a new technology field.

As of 2021, Kazakhstan holds one of the top places in a bitcoin mining and has the second place in the world’s (18.1%). Every year the country’s budget increased by an amount more than $297 million, received from blockchain technologies. It is planned that within the nearest five years, the field will attract investments of about $1.1 billion.