Kazakhstan to Embrace Cryptocurrency with Exchanges
Nicholas Otieno Jul 28, 2021 07:10
Opening bank accounts for cryptocurrency investment will soon be possible in Kazakhstan.
The Kazakh Association of Blockchain and Data Center Industry has announced that cryptocurrency exchanges registered on the Astana International Financial Center (AIFC) will soon begin working with local banks to allow their customers to have the opportunity to transact cryptocurrencies officially.
The development is set to become possible after successfully completing a pilot project launched by AIFC with second-tier banks.
Potential investors who want to buy, sell and hold cryptocurrencies will be required to have a legal account in one of the banks registered with the AIFC. The move would allow them to transfer fiat money, purchase digital assets, and conduct other transactions in Kazakhstan’s crypto trading market.
The pilot project is anticipated to last one year as the Kazakh government plans to use it to assess the benefits and risks of digital assets. Currently, the circulation of crypto assets is still prohibited in the country, but the experts hope that the restrictions will be removed or lifted once the project is completed.
Some experts explained the reasons for the revision of the official policy toward digital assets. Sergey Putra, Government Relations Coordinator of the Kazakh Association of Blockchain and Data Center Industry, said:
"The global premise is that crypto turnover is a fairly large volume of finance. It is billions of dollars of daily turnover around the world. And even if Kazakhstan takes a fraction of a per cent, even one per cent of this turnover, this is serious money that will come to Kazakhstan in the form of investments and will remain here in the form of taxes, jobs and salaries. This is a very large industry, which Kazakhstan is still bypassing.”
The second reason why the cryptocurrency is recognised in Kazakhstan is that the share of the country’s crypto mining has risen six times and becomes the third-largest producer of cryptocurrencies globally. This has happened after China’s share in global Bitcoin mining declined by nearly 30% since September 2019 and now accounts for less than 50% of the entire network’s capacity.
Another reason is that the introduction of legal cryptocurrency trading is being recognised as an important effort to curb cryptocurrency fraud. Authorities expect that the project will assist in preventing fraud in the crypto industry by facilitating safe cryptocurrency trading and exchanges for local residents. Cases of local investors being lured into fake crypto investment schemes and losing money have been rising.
Reaping fruits of China’s crypto crackdown
Since China "declared war" on its booming crypto sector, Kazakhstan was tipped to benefit from the industry-shaking exodus.
In recent weeks, Chinese authorities have been implementing its crackdown agenda, shutting down almost 90% of crypto mining operations countrywide.
Kazakhstan has recently emerged as the major destination for cryptocurrency activities in the world. The third world nation has become a connection hub to complex computers and billion-dollars crypto trends. Such development has been influenced by a mix of cheap electricity and the allegiance of lawmakers, which attract big players from Western nations who are already hungry for new crypto investment opportunities.
Long hailed for its extensive mineral wealth, Kazakhstan is now pursuing a different sort of cryptocurrency investment. Not iron, Copper, or Gold, but rather cryptocurrency trading and mining has surfaced as an attractive investment opportunity in the Central Asian nation.
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