Financial authorities in Kazakhstan have set out to legalize the trading of cryptocurrencies by adopting a licensing regime for platforms providing such services.
The government seeks to expand the regulated turnover of digital assets in the country where crypto miners currently have few legal options to sell the digital coins they are minting.
Government institutions in Kazakhstan are taking steps to legalize crypto trading via state-approved exchanges, a high-ranking representative of the central bank unveiled. The goal is to expand the regulated circulation of cryptocurrencies in the Central Asian nation, which has attracted a significant number of Bitcoin miners over the past few years.
The National Bank of Kazakhstan (NBK) and the Agency for Regulation and Development of the Financial Market have jointly developed a set of legislative amendments aimed at achieving comprehensive regulation of the digital assets market, announced Уеrlan Ashykbekov, director of the monetary authority’s Payment Systems Department.
In the part concerning “unsecured digital assets,” or decentralized cryptocurrencies like Bitcoin, the legislative changes are designed to “secure the legal status of crypto exchange platform operators” by “licensing their activities.”
This encompasses the adoption of specific requirements for crypto trading venues, including the introduction of risk management and internal control systems, rules governing interaction with users, and mechanisms to protect assets and ensure transparency, the NBK official detailed.
The amendments institute a new category of market participants – crypto exchange service providers. The latter will be able to facilitate crypto-fiat exchange after acquiring a license under the supervision of the central bank.
The authorized platforms will be allowed to operate across Kazakhstan. Currently, miners and investors can legally trade only on exchanges registered within the jurisdiction of the Astana International Financial Center (AIFC) hub. These will remain separately regulated but will be integrated with the rest.
The National Bank of Kazakhstan will approve a list of cryptocurrencies available for purchase and sale on the trading platforms that will be licensed under the new rules, Ashykbekov noted. Quoted in a press release, he highlighted:
“The purpose of these measures is to expand the regulated turnover of unsecured digital assets, reduce systemic risks and ensure consumer protection.”
The establishment of a regulated environment will provide safe investments, confident participants and transparent transactions, the central bank executive insisted.
Recognizing the growing demand for crypto trading services, NBK Governor Timur Suleimenov suggested last month that Kazakhstan should launch a “national cryptocurrency exchange.” And in March, lawmaker Azat Peruaşev urged for the creation of a “crypto bank.”
Both proposals and the latest legislative move seek to legalize Kazakhstan’s massive gray market for cryptocurrencies, which according to Peruaşev, amounts to 90% of all crypto-related transactions.
Current rules oblige crypto miners operating in the country to sell 75% of their coins via AIFC-registered trading platforms, the country’s Deputy Minister of Digital Development Kanysh Tuleushin remarked this month after revealing that tax revenues from the industry reached $35 million in three years.
New legislation to also create market for ‘secured’ digital assets
Another objective for Kazakhstan’s financial authorities is to establish and regulate a market for “secured” digital assets. Unlike cryptocurrencies, the so-called “digital financial assets” (DFAs) have “legally obligated” issuers and “confirmed collateral.”
The authors of the new legislation have classified them in three categories – stablecoins, backed by fiat currency, DFAs certifying rights to financial instruments and assets other than money, and digital analogues of traditional financial instruments like bonds and shares or tokenized assets.
DFAs will be integrated into the country’s existing financial system as a new class of instruments, bridging the gap between the traditional capital market and digital technologies. Уеrlan Ashykbekov pointed out that they can increase efficiency and simplify businesses’ access to financial channels.
In developing the new law, Kazakhstan regulators took into account the recommendations of key international bodies such as the Financial Action Task Force (FATF), the IMF, and the Bank for International settlements (BIS) as well as the provisions of the EU’s Markets in Crypto Assets (MiCA) framework.
The NBK is also launching a regulatory sandbox for digital assets.
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