The Kazakhstan financial regulator is seeking to protect investors from completely losing their capital in the volatile digital currency market, it claims.
Kazakhstan has seen a spike in block reward mining activities over the past year, which the government sees as the cause of the rise in power outages in the country.
According to Cambridge Centre for Alternative Finance’s BTC mining map, US overtook China as the country with the majority of the hash power supporting the BTC network.
The9 Limited and LGHSTR Ltd deal aims to invest and build digital currency mining facilities in Kazakhstan.
The Nasdaq-listed company’s subsidiary NBTC Limited has signed a non-binding term sheet with KazDigital Ltd to set up a joint venture company in Kazakhstan to build a digital currency mining facility.
The country’s pilot project seeks to make digital currency investment mainstream to attract investment from the global community as well as enhance protection for its local investors.
President of the Republic of Kazakhstan Kassym-Jomart Tokayev signed the law that will introduce a new tax levy on block reward mining companies operating in the country.
Although the drop in hash rate will have a negative consequence on the digital currency markets in the short term, there are a few positive externalities that will come out of China’s ban on Bitcoin mining.
In freezing the sales, Bitmain says it is attempting to prevent customers from incurring losses on new machines, as well as protecting themselves from sustaining more significant losses.
Kazakhstan is working on implementing enabling regulations for the industry at a time when block reward mining in the country has soared.
With the coronavirus pandemic weighing heavily on the government’s hand, the tax will assist Kazakhstan in its recovery efforts.