Crypto trading has taken the back seat in the digital economy in 2022, with the market remaining under the bears' control for most of the year. Furthermore, traders have seen their faith rocked by the consecutive failures of centralized exchanges. These intermediary marketplaces have been the powerhouse of the industry since its humble beginnings. Now, they seem to crumble under mounting allegations of scams, lawsuits, and solvency concerns. Meanwhile, they make a convincing case for the imminent decentralization of crypto…
The Kazakh government has plans for the trial of a pilot project relating to exchange platforms in the Astana International Financial Center (AIFC).
As a result, crypto exchanges in Kazakhstan could operate under more legal protection if the test pilot is successful. Working alongside local banks and governmental bodies these platforms will be able to offer their services beneath the AIFC. Former Kazakh President Nursultan Nazarbayev proposed the creation of the center in 2015.
The idea behind this was to see central Asian Kazakhstan evolve into a financial hub in the region. This would presumably follow the center’s efforts to expand the country’s non-banking financial sector. In 2018, 3 years after it was first proposed the center kicked off operations and has since amassed 1046 registered organizations.
Amidst a worldwide regulatory crackdown, the Kazakh leadership shared on Friday that reviews of certain existing policies were underway.
In response to the Russia-Ukraine conflict, several nations around the globe have made amendments to financial legislations. Likewise, others have passed new laws or begun working on clearly-defined regulatory frameworks.
Kazakhstan to Amend Crypto Policies
As one of Russia’s allied nations, Kazakhstan has maintained a relatively neutral stance during the war. Its forthcoming amendments could however bar the use of banking services to process crypto transactions and other related activities.
Despite the adjustment, the reviewed legislation will not enforce a blanket ban. Instead, transactions will occur according to prescribed processes. Going by the public release, all exchanges in concern must be aware of the “origin” of every transferred crypto in its care, as well as the purpose of transactions. Furthermore, all transactions will be under the watch of appropriate financial officials.
Following China’s nationwide crackdown on cryptocurrencies last year, Kazakhstan occupied a position of relative importance in the crypto space. Before the ban on mining China had hosted a large portion of the global BTC hashrate. After the ban, however, several miners migrated to the Central Asian Kazakhstan, drawn by its abundance of electricity.
Mining operations in Kazakhstan, however, remain on temporary shut down as the burden on the national energy grid continues to grow. Just last month, with Kazakhstan in the throes of severe power shortages, the government ordered to close down about 106 mining pools.