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Kazakhstan government acquires whopping $1.5 million as mining fee from miners in Q1 2022

In the first quarter of 2022, the government of Kazakhstan acquired 652 million Kazakhstani tenges ($1.5 million) in fees from cryptocurrency miners. According to a recent government report, despite objections to a new cryptocurrency mining tax system implemented in April, an internet outage, public upheaval, and a heavily carbonised energy infrastructure, the Kazakhstani government has received $1.5M in fees from crypto mining businesses.

Fiscal quarters are three-month intervals that occur inside a company’s fiscal year. Fiscal quarters are used by publicly listed corporations to plan the publishing of financial reports and the payments of stock dividends. The first fiscal quarter (Q1) of 2022 occurred between January 1 and March 31, 2022.

The fee is collected for the actual quantity of electrical energy spent in the execution of activities, breaking down the rates by location. Miners are awarded with new coins for assisting with the network’s security. It is a computationally complex operation that requires a lot of power.

Top 3 fee income districts in Kazakhstan

The top 3 fee income districts in Kazakhstan are Nur-Sultan, the country’s capital and administrative centre, worth 277.3 million tenges, West Kazakhstan, worth 143.1 million tenges, and Aktobe, the country’s fourth-largest city, worth 48.9 million tenges. The amount is part of the national budget.

Kazakhstan’s vice-minister of energy, Murat Zhurebekov said, for those who operate outside the law, the govt agreed to enforce a 1 tenge ($0.0023) per kWh extra charge in 2022. Some mining companies saw it as a manner to justify processes and take a step from a grey list to a white list.

The hazards of remaining in the nation became too big for several enterprises. Wired reported earlier this year that Bitfufu would collapse in December 2021, followed by three additional unknown firms.

BitFuFu is a mining platform that leases the computing power of self-built and cooperative mines, letting users mine simply.

Kazakhstan provide a safe haven for displaced miners

After China banned financial institutions and payment companies from providing services related to cryptocurrency transactions in May 2021, Kazakhstan provided a safe haven for displaced miners looking for cheaper electricity for 87,849 computers. It quickly discovered, however, that it was unable to meet the increasing demand put on its mostly coal-based electrical system.

Observing this, the authorities pledged to cut grid consumption by turning off power to miners and seeking more supplies from Russia’s eastern neighbour Inter-RAO, a Moscow-based energy business.

Glasgow University’s Professor Luca Anceschi told the Financial Times that,

“Getting a supply of power from Russia can alleviate the problem in the near term, but I believe there is a significant conversation to be had about what type of energy strategy Kazakhstan is actively achieving.”

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