The draft law "On Digital Assets in the Republic of Kazakhstan", initiated by the deputies of the Parliament, and the accompanying amendments were presented today to a wide range of interested parties.

Opening the presentation, Deputy Chairman of the Mazhilis Pavel Kazantsev noted that the draft laws were developed in order to improve legislation in the field of digital assets.

– We have all witnessed how a whole digital mining industry has developed on the territory of our country in just a few years. This costly and energy-intensive computing production has been practically in the gray zone of regulation for more than five years. Uncontrolled placement of computing centers, unbalanced electricity consumption, working "in the dark", under the cover of production, led to problems in our power system. At the same time, the industry itself did not participate in any way and was not part of the country's economy," Pavel Kazantsev noted.

According to the initiator of the project, Deputy Ekaterina Smyshlyaeva, the legalization of digital mining and the lack of further clear regulation of the industry led to its uncontrolled development. As of today, only a third of mining companies have voluntarily registered in the register of the state body.

– According to the current legislation, the turnover of unsecured digital assets is prohibited in Kazakhstan. All operations with cryptocurrencies, including mining and the operation of crypto exchanges, within the framework of the pilot project are carried out only by the International Financial Center. However, even this activity is not yet regulated by the norms of the constitutional Law "On the Astana International Financial Center," the deputy stressed.

The bill initiated by the deputies includes a legislative definition of concepts in the field of digital mining, licensing of mining activities, the concept of an "energy quota" for legal miners is introduced. In addition, it is proposed to amend related industry laws, including tax legislation regarding the taxation of digital mining. Vice Minister of Digital Development, Innovation and Aerospace Jaslan Madiyev, who was present at the presentation, explained that Kazakhstan's experience in taxation of digital mining has significant differences from other countries.

– The UK and the USA set income tax (Income tax) and capital Gains Tax (Capital Gain Tax). While Russia and Uzbekistan are limited only by income tax. When discussing the draft law in the Parliament, we hope to approach the issue of disadvantages and advantages of the current taxation procedure in a balanced manner, thus determining the most profitable option for the state and business," the Vice Minister said. Meanwhile, the deputies had questions about the distribution of powers to regulate mining activities.

– Won't we create a huge monopolist in the face of the AIFC with this project? If the AIFC is endowed with such enormous powers, then what role is assigned to the Ministry of Digital Development? – Majilis deputy Aliya Saparova asked.

– From the point of view of the AIFC, we do not see the risk that it will turn into a monopolist, because it is an ecosystem that makes it possible to develop business, register companies and operate according to the principles of English law, – said Jaslan Madiyev.

– This bill only fixes the existing functions of the AIFC. The activities of crypto exchanges and digital assets in the AIFC have been regulated since 2018. When sending the bill to the Government, a positive conclusion was received from the antimonopoly department," explained Asylbek Davletov, Managing Director for Financial Technologies of the AIFC Committee. The online presentation was also attended by members of political parties not represented in Parliament, representatives of the National Management Holding "Baiterek", the National Chamber of Entrepreneurs "Atameken" and NGOs. The discussion will continue within the framework of working groups in the Majilis.

Postfactum.kz from Parlam.kz