Following China’s ban on crypto mining in 2021 due to environmental concerns. For bitcoin miners fleeing China, Kazakhstan has become a safe haven. Kazakhstan, which was formerly the world’s second-largest bitcoin centre, has been undergoing rapid regulatory reforms since the beginning of 2022. In an effort to develop the crypto industry and blockchain technology in Kazakhstan, the government started a pilot programme on June 16 to encourage local banks to collaborate with approved crypto exchanges.
The Kazakh government has approved guidelines for a pilot project which will run until the end of 2022. A dedicated task force will be established to establish collaboration standards between crypto exchanges and Kazakhstani second-tier banks.
The Ministry of Digital Development, Innovation, and the National Bank of Kazakhstan, the Agency for Financial Monitoring, the Agency for Regulation and Development of Financial Markets, the Astana International Financial Centre, the Association of Kazakhstan Financiers, and the banking and digital asset market will all be represented on the special task force.
The interaction of AIFC cryptocurrency exchanges with Kazakhstan’s STBs is a pilot project aimed at establishing an adequate regulatory environment for Kazakhstan’s potential as a regional crypto hub. The digital asset platform is managed by cryptocurrency licensed by the Financial Services Regulatory Commission (AFSA) in collaboration with second-tier banks. In the near future, the project’s rules will be posted on the HFO website.
If the pilot project is a success, adjustments will be made to national legislation as well as AIFC statutes to encourage the establishment of the local bitcoin industry. Bagdat Musin,
Kazakhstan’s Minister of Digital Development, Bagdat Musin stated:
“The cryptocurrency industry is not only mining but also includes cryptocurrency, digital currency, digital wallets and other blockchain technologies. This is an industry that, like other industries, can work for the good of the country and benefit our economy. We need to turn the cryptocurrency exchange into a source of income and move to the next level of financial technology development. It is necessary to create a full-fledged ecosystem, so that digital assets generated by Kazakhstan’s electricity will be traded on local cryptocurrencies, and revenues will remain in the country.”
Bitcoin mining is currently encouraged in Kazakhstan. Musin argued that the country needed to improve its earnings from the sector by pursuing deals involving already mined bitcoin holdings. He asserted that by taking this measure, the country would be able to go to the next level of financial and technological prowess.
