At an average rate of US$ 230 Million each year, crypto miners will enable Kazakhstan Government to collect more than US$ 1.5 Billion in the next 5 years. In addition, at least US$ 300 Million on an annual average has been paid by miners in the form of taxes. But there is an electricity crisis that needs to be addressed if Kazakhstan wants to reach the targeted figures.
Crypto mining operations are legal and licensed under the Kazakhstan Government’s rule. In fact, miners have been contributing a great in strengthening the country’s economy as well. According to the estimates of Kazakhstan’s blockchain association, each year the Government collects revenues exceeding US$ 230 Million from the crypto miners. In addition, miners have been paying more than US$ 300 per annum in the form of taxes. So allowing the activity to grow is undoubtedly in the best interest of Kazakhstan.
However, there have been some issues that have developed recently involving crypto miners and government authorities of Kazakhstan. The issue pertains to a huge amount of electricity consumption and crypto mining is apparently the highest power-consuming activity. The issue has now converted into a power shortage crisis and difficulty is being faced by the Government to overcome the crisis.
The Government has now come up with an alternate plan in which the Government is intending to outsource the power source. For this, the Ministry of Energy has become partners with a Russian company called Inter RAO. Inter RAO is currently the leading power producing company in the Russian Federation. It has been confirmed that by the end of November this year, Inter RAO will be supplying electricity to Kazakhstan Government. By doing so, Kazakhstan is expecting to overcome the crisis and subsequently will help domestic mining industry to grow.
Otherwise, it was even thought by Kazakhstan Government that they needed to control mining activity. But considering the huge amount of revenues collected from the activity, the state does not wish to compromise on anything. Instead, the Government is hoping that from five years here onwards, Kazakhstan will make US$ 1.5 Billion in revenues. This amount only reflects the money collected from the mining activity only. Similarly, there would be an additional revenue of the same amount which the Government can collect from miners as taxes.
There has been a further suggestion that Kazakhstan should immediately allow crypto trading platforms in the country as well. If this happens then the annual revenue collection from crypto mining can increase from US$ 230 Million to US$ 400 Million.
Eventually, what blockchain association of Kazakhstan is suggesting is that the continuation of mining activity actually favors the Government. But for the time being the state is expecting a shortage of at least 600 MW electricity which has to be made good immediately. Otherwise, it wouldn’t be better in nobody’s favor i.e. the Kazakhstan Government and the crypto miners.