Kazakhstan had not been in favor of virtual currencies earlier. However, the Government seems to have changed its mind now, especially after Changpeng Zhao of Binance paid a visit to the country. It has decided to initiate a pilot project concerning the setting up of cryptocurrency exchanges, along with the regulation of mining for coins.
Establishment of a Working Group
The announcement was made by the Ministry of Digital Development, Innovations, and Aerospace Industry. The pilot project will launch in a specific economic zone. This zone belongs to the Astana International Finance Center. The Republic of Kazakhstan governs it. According to the Ministry, the Government aims to bring about communication between the cryptocurrency exchanges and selected second-tier local banks.
The first step towards initiating this pilot project showed up in the establishment of a working group. This working group consists of representatives from diverse organizations. These organizations include financial market regulators, the Innovation and Aerospace industry, Astana International Finance Center, the Ministry of Digital Development, monitoring agencies and the Financial Monitoring Agency, the Association of Financiers, members from the digital assets market, and crypto and finance market stakeholders, and the National Bank.
The working group began their task in earnest by setting up some rules and policies for the pilot project, all within a regulatory framework. The banks that came into play must be legitimately registered with the concerned monetary authorities. Similarly, the digital currency exchanges must display authentic licenses to tackle various digital assets.
Binance to Lend a Helping Hand
For now, the authorities have decided that the pilot project will remain in existence until December 2022. It will support cryptocurrency exchanges that have been awarded legitimate licenses by the recently-established Astana Financial Service Authority (AFSA). These events will serve as the perfect blueprint for the future growth of anything connected with cryptocurrencies in Kazakhstan. Soon enough, the nation should set itself up as a cryptocurrency hub. When everything is in place, the government hopes to make everything clear on its official web pages, that is, the AIFC website.
Kazakhstan is confident of fulfilling its ‘crypto’ goals, for Binance has come forward to lend a helping hand. Considering that, Binance is the world’s best-known and largest digital currency exchange, it is a significant step.
Binance has already helped with developing regulations regarding digital assets. Furthermore, it will work in close conjunction with the Ministries, for setting up the Astana hub and filling it with international and local talent. Binance will also help in integrating the digital assets marketplace with Kazakhstan’s banking infrastructure.
In the words of Nurhat Kushimov, the head of AFSA, the idea is to ensure that the environment is favorable for sustainable and dependable companies to function, comfortably and confidently. The fintech establishments’ activities in Kazakhstan must look for approval from the Astana Financial Service Authority. It is compulsory. In its turn, the AFSA takes its task very seriously, for it conducts a thorough investigation into every company’s background. Even after declaring the company legitimate, it monitors its behavior regularly.
Even the Minister of Digital Development, Bagdat Musin, feels that it is imperative to have a well-built ecosystem in place. Thus far, the nation’s electric energy has come into play for mining digital assets. It would become possible to trade these assets at the nation’s local crypto exchanges, to the maximum extent. As a result, whatever gains came through, would remain within the boundaries of the country to help in its economic progress.
The Parliament of Kazakhstan also decided to have a crypto mining tax in place. This tax would be in alignment with the amount of electricity being utilized for mining activities.
Binance also affixed its signature to a memorandum offered by the Ministry of Digital Development. The famous exchange would offer relevant advice on setting up a suitable legislative framework related to the handling of cryptocurrency assets. It would also aid in initiating a worthy regulatory policy for the benefit of the Republic.
Although Kazakhstan is keen on a pilot project for setting up crypto exchanges, it is also looking toward other aspects of virtual currencies. To illustrate, the authorities are also thinking about utilizing advanced blockchain technologies, better usage of digital currencies, storing of wealth in wallets, mining with greater efficiency, etc.
