Government officials in Kazakhstan have approved regulations that will regulate interactions between legitimate coin trading platforms and traditional financial institutions. The new rules will allow registered cryptocurrency exchanges to have bank accounts in those countries.
Pilot Project to Develop Kazakhstan into a Regional Crypto Hub
regulation allows crypto exchanges to be registered at the Astana International Financial Center (AIFC) which will be served by second-tier banks in Kazakhstan has been adopted by a working group that includes representatives from the Ministry of Digital Development, central banks, financial regulators, as well as members of the financial and digital assets sector, the ministry announced.
The initiative is part of a project aimed at introducing a regulatory framework that will facilitate the potential development of Kazakhstan as a regional crypto hub. This will be implemented as a pilot throughout 2022 with the participation of a crypto trading platform licensed by the AIFC Financial Services Authority (AFSA), a detailed press release.
Kazakhstan attracted cryptocurrency miners when China disrupted 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 senior government official explained:
Like any other industry, that can and should be used to benefit our economy. We need to make money on crypto exchanges – this is the next level of development of financial technology.
Musin stressed that Central Asian countries need to create a complete ecosystem so that digital assets extracted using Kazakhstan’s electricity are traded on local exchanges and their respective revenues remain in the country.
The Digital Ministry stressed that the pilot project will allow for regulated digital currency trading, which will ensure proper protection for retail and professional investors. If its implementation is successful, the authorities in Nur-Sultan plan to introduce amendments to state laws and actions governing the AIFC.
The AIFC Financial Services Regulatory Committee is now the only body that oversees the activities of fintech companies in Kazakhstan, said AFSA Director Nurkhat Kushimov. All entities applying for licenses are fully inspected and monitored, he said. “Our goal is to create an environment where only a reliable and stable company can be trusted by our customers,” the official said.
The positive development for the local crypto industry came after a recent statement by the National Bank of Kazakhstan that announced it was closely following the market while noting it was too early to talk about the legalization of cryptocurrencies. At the same time, monetary authorities say they want to maximize the potential for innovation offered by crypto technology.
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