The Chinese government has recently enacted legislation prohibiting cryptocurrency mining and trade.
Crypto-related firms have suffered as a result of the limitations.
Kazakhstan is luring miners here with some of the cheapest electricity in the world and pro-crypto legislation.
Although individual crypto ownership is not prohibited in China, the country’s crackdown has had a negative impact on the uptake of crypto assets. The Chinese government ordered financial institutions, like as banks and other payment platforms, to stop supplying clients with any cryptocurrency-related services in May.
As a result, a number of cryptocurrency businesses have shut down, while others have relocated their operations. For example, BTC China (BTCC), the country’s oldest Bitcoin exchange, recently announced the closure of its crypto trading operations in response to the country’s anti-Bitcoin mining action.
Despite the fact that China has long been home to more than half of the world’s Bitcoin miners, the country now wants them to leave as soon as possible. Several crackdowns on Bitcoin mining and trading were implemented by China’s authorities in May, culminating in “the great mining migration.” The exodus is presently underway, and it has the potential to reshape Kazakhstan’s fortunes.
Meanwhile, China’s largest crypto exchange, Huobi, has tightened its rules for fiat money trades as the crypto crackdown intensifies. According to Huobi, all customers can withdraw cryptocurrency within 24 hours of making a purchase, with some users needing 36 hours. Because certain people in China are known to use cryptocurrencies to launder money, Huobi has introduced the “Limited time limit withdrawal” feature to make it more difficult for people who use black money to buy cryptocurrencies to transfer their funds away.
Kazakhstan, China’s next-door neighbor, has emerged as the most promising destination. Following an exodus of mining operations from China, Kazakhstan is quickly becoming a new center for the cryptocurrency mining sector.
Kazakhstan’s coal mines provide a low-cost, ample energy supply because it is a major coal producer. While the government has policies that make it easier to create offices rapidly, crypto miners who need to establish physical facilities in a short amount of time will benefit from the government’s lax attitude toward construction.
BIT mining, a Chinese Bitcoin mining company, has already shipped 320 mining machines to the former Soviet Republic, with another 2,600 on the way.
Although government-owned power plants in China have banned crypto mining, private power plants continue to provide crypto miners. However, because the majority of the electricity is generated by government power plants, miners have little choice except to relocate, which makes them frantic to find new areas.
Energix, one of Kazakhstan’s largest cryptocurrency mining companies, is assisting miners who are prepared to scale up in response to rising demand for their services. The cryptocurrency mining company is in talks with other companies, notably from China, about investing in new mining operations in Kazakhstan.
While the procedures of going from China to Kazakhstan look to be simpler, crossing the Pacific to reach the Old Silk Road may be difficult.
Kazakhstan appears to have piqued the interest of Chinese miners to the point where some stakeholders believe the country may be at capacity to welcome more. Aside from that, Kazakhstan is rumored to be planning to impose a fee on cryptocurrency miners’ power consumption. The Senate is considering a new bill that is part of a package of tax code modifications. If passed, miners would have to pay one tenge (about US$0.0023) every kilowatt-hour for power used./n
