Kyrgyzstan’s New Legislation for Crypto MinersColin Baseman
Kyrgyzstan is living a life full of events and the country’s economy is undergoing many transformations. This applies to all spheres, the crypto community included. The local news agencies report that the government is likely to poise legitimization of crypto mining. The government is ready to deliberate on a tax system – what they suggest is that miner will have to submit to a new regime, which, in turn, would become Kyrgyzstan’s first framework regulating all kinds of crypto activities occurring across the entire territory.
The legislation in the republic includes a bill to tax as well as regulate activities related to cryptocurrency mining. Lawmakers have looked through the main aspects and discussed the points that seem essential.
The mentioned bill will allow the government to increase revenue through taxation – the parliament will establish certain obligations for miners. They will also introduce clear and comprehensive definitions for the most commonly used terms like ‘virtual assets’ or ‘mining practices’ as well as other issues that the crypto market and the entire industry may require.
The newly established regime comprises the initial key principle applied to cryptocurrency liberalization that the republic requires in the near future. Six years ago the government banned crypto assets and wouldn’t let people make payments utilizing this kind of fund.
Benefits and Profits of the Crypto Market
Taxing times are mentioned in the law. What the government proposes is that miners should pay taxes at a rate of fifteen percent of profits gained via the trade of mined assets. The authorities proposed this bill almost one year ago. According to researchers and analysts, this approach would give an extra four million USD – currently, the country’s budget is one billion USD per year.
The parliament also pondered upon the introduction of a designated power rate for participants. The Supreme Council suggests the rate should be around 0.05 USD kW/h, which is seventy percent higher than the average of approximately 0.030 kW/h across the republic.
The Authorities Are Looking for a Solution
Lawmakers pay attention to the influence of crypto mining activities on a larger scale. They believe these activities may affect the power supply of the country. This would negatively reflect on the current situation since at present, Kyrgyzstan exports almost twice as little power as it imports. Official representatives admit and fully understand the lawmakers’ concerns. At the same time, they realize that even temporary suspension of mining activities will lead to illegal crypto operations. This conclusion comes from the events that happened last autumn.
A year ago, the country’s government voted for ceasing supplying power to around forty-five mining companies. Last September was especially challenging to all miners since the parliament asserted that all of the mentioned firms’ overall consumption of one hundred and thirty-six megawatts was outrageously large. It exceeded that of the neighboring regions. All in all, Naryn, Talas, and Issyk-Kul combined consumed less electricity within the same period.
No doubt, the country is steadily developing; however, the changes that the authorities make do bring a huge difference to the republic’s economy and well-being. The wise decisions that the parliament may take some time and the new laws and regulations related to the crypto industry will start functioning opening new opportunities to a wider group of people.
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