Kazakhstan, which is one of the major Bitcoin (BTC) mining hubs in the world, has revealed its intentions to put in place new cryptocurrency legislation to reduce tax fraud and illegal trading activities.

On February 6, Kazakhstan’s President Kassym-Jomart Tokayev signed new legislation that renewed the nation’s stance against the illegal issuance of crypto assets and mining activities. This law also reinstated the nation’s stance against illegal mining operations. The first of two separate laws requires issuers of collateralized digital assets to obtain government authorization.

In addition, said issuers will be monitored in accordance with current legislation in the country, which is entitled “On Combating the Legalization (Laundering) of Proceeds from Crime and the Financing of Terrorism.” The new regulation will enter into force on April 1, 2023.

The second piece of the proposed law targets insecure digital assets, which are often acquired through the process of cryptomining. In Kazakhstan, cryptocurrency miners will soon be required to sell at least 75% of their profits through licensed cryptocurrency exchanges. This measure is being taken to limit the probability of tax avoidance. This regulation, which will come into force on January 1, 2024, will remain in force until January 1, 2025 and its main purpose is to collect “information on the income of digital miners and digital mining pools for tax purposes.”

Each cryptocurrency mining license in Kazakhstan is only valid for a period of three years and its price varies depending on whether or not the miner owns the mining facility. In Kazakhstan, all mining licenses are granted on a first-come, first-served basis.

Along with the implementation of the aforementioned regulations, Kazakhstan started the “digital tenge” pilot project for its central bank’s digital currency (CBDC) initiative.