The government introduces a bill to increase electricity fees for Bitcoin miners operating in the country. Disconnecting most mining companies from the electrical system has prevented them from receiving most of the expected amount.
Kazakh may have earned over USD 1.5 million from Bitcoin (BTC) mining in the first quarter of 2022. However, they stopped receiving the funds as they restricted the activity.
The Kazakh government stated that Bitcoin mining would have added 652 million tenges (KZT) to the state budget. That amount of money is equivalent to just over one and a half million US dollars.
They said that energy payment would have allowed the money to reach the state coffers. They explained that electricity is the primary fuel for the mining equipment to conduct their operations.
The government specified that 12 regions of the Asian country would have contributed to the payment for Bitcoin mining. They would have made the above amount of money accessible to the State.
The Kazakh Government Has No Access to the Money Left by Miners
Miners left a significant amount of money, but the Kazakh government does not have full access to it due to restrictions against the activity. It seems that they missed the opportunity of profiting from Bitcoin mining.
The government highlighted that they had disconnected most mining companies from the electrical system to guarantee energy security. That has happened since October 2021, so the state budget has not received most of the expected amount.
In March, the government dismantled nearly 100 allegedly clandestine Bitcoin mining farms to minimize the energy crisis.
They also said leading miners chose to disconnect their equipment and leave Kazakhstan amid increased regulations and state surveillance. In addition, they pointed out that political instability directly affected the global hash rate of the Bitcoin network.
The Government Discusses a Bill to Raise Electricity Fees
The government noted that they are discussing a bill before the Parliament of the Republic of Kazakhstan. The draft law establishes an increase in the fee imposed on Bitcoin miners, which could hinder the development of the activity.
Electricity for miners costs KZT 1 (equivalent to USD 0.0023) for each kWh consumed by a farm, according to the government of Kazakhstan.
A raise in the electricity rate would affect the operators since that would add to the low profitability of Bitcoin mining. The activity has been in the red for weeks and at unseen levels since 2020.
The Increase in Electricity Rates Impacts their Hash Rate
Kazakhstan has welcomed many miners fleeing China after the ban on the activity, but they sought to counteract the trend. As a first containment measure, they decided to apply an increase in electricity rates.
For that reason, Kazakhstan went to third place after being the country with the second-highest enabled hash rate.
The Asian country is home to 13.22% of the global hash rate, a drop of 5% since the migration of Chinese miners began in September. According to Cambridge University, they remain a leading mining country, although they are now behind the United States (37.84%) and China (21.11%).
However, the more restrictions the Kazakh government imposes, the less likely they will see the funds left by the mining industry.
By Alexander Salazar
