Government officials in Kazakhstan have approved regulations that will govern interactions between authorized coin trading platforms and traditional financial institutions. The new rules will allow registered cryptocurrency exchanges to have bank accounts in the country.
Pilot Project to Develop Kazakhstan Into Regional Crypto Hub
Regulations allowing crypto exchanges registered at the Astana International Financial Center (AIFC) to be serviced by second-tier banks in Kazakhstan have been adopted by a working group comprised of representatives of the Ministry of Digital Development, the central bank, financial regulators, as well as members of the financial and digital asset sectors, the ministry announced.
The initiative is part of a project aimed at introducing a regulatory framework that will facilitate the development of Kazakhstan’s potential as a regional crypto hub. It will be implemented as a pilot throughout 2022 with the participation of crypto trading platforms licensed by the AIFC Financial Services Authority (AFSA), a press release detailed.
Kazakhstan attracted cryptocurrency miners when China cracked down on the industry in May last year. According to Digital Development Minister Bagdat Musin, however, the crypto industry is not only mining but also includes crypto exchanges, digital wallets, and other blockchain platforms. The high-ranking government official elaborated:
It is like other industries, which can and should work for the benefit of our economy. We must make money on crypto exchange — this is the next level of development of financial technologies.
Musin insisted that the Central Asian nation needs to create a full-fledged ecosystem so that the digital assets extracted using Kazakhstan’s electricity are traded on local exchanges and the respective income remains in the country.
The Digital Ministry emphasized that the pilot project will allow the regulated trading of digital currencies, which will ensure proper protection for both retail and professional investors. If its implementation is successful, the authorities in Nur-Sultan plan to introduce amendments to the country’s legislation and the acts governing the AIFC.
The AIFC Financial Services Regulatory Committee is now the only body overseeing activities of fintech firms in Kazakhstan, AFSA Director Nurkhat Kushimov pointed out. All entities applying for a license are thoroughly checked and supervised, he stressed. “Our goal is to create an environment in which only trustworthy and stable companies that enjoy the trust of customers would operate,” the official stated.
The positive development for the local crypto industry comes after a recent statement by the National Bank of Kazakhstan which announced it’s closely following the market while noting it’s too early to talk about legalization of cryptocurrencies. At the same time, the monetary authority said it intends to capitalize on the potential for innovation that crypto technologies offer.