Kazakhstan Lawmaker Calls on Gov’t to Create a ‘National Crypto Bank’
A lawmaker in Kazakhstan has told the government it should create a “cryptobank” that could act as a legal exchange and custody platform.
Per a report from the Russian-language, Kazakhstan-based news outlet Tengri News, the call came from Azat Peruashev. The latter is a member of the Mäjilis, the Kazakh lower house of parliament.
Kazakhstan: Crypto Bank Proposal
Peruashev said the National Bank of Kazakhstan and regulated banks that offer “digital financial instruments” could take part in the “project” that would eventually see a “crypto bank emerge.”
The lawmaker claimed that this plan would help protect citizens from scammers and stop money flowing out of Kazakhstan. Peruashev said:
“Kazakhstan lacks legal infrastructure for the […] use of [cryptoassets]. Instead, we have a [partial] ban on the circulation of cryptocurrencies. This means there is a lack of state regulation in the crypto market.”
This lack of regulation helps boost the “shadow economy,” the lawmaker explained, adding:
“According to some data sources, 90% of cryptocurrency transactions in Kazakhstan take place outside the legal sector.”
As such, he claimed, there has been a rise in the number of illegal crypto exchanges and quasi-legal crypto “schemes” in Kazakhstan.
The lawmaker added that crypto was also being used to evade taxes and finance criminal activities.
Peruashev added that Kazakh citizens are also “losing large sums of money” to “crypto scammers, illegal platforms, financial pyramids and scam coin projects.”
Kazakh Money Leaking Abroad, Says MP
Peruashev claimed that “billions of tenge worth of cryptocurrency” are “illegally transferred abroad” from Kazakhstan. The state, he added, has no control over any of these transactions.
“An effective tool for regulating the industry could be the creation of a crypto bank. This institution would control, exchange, and store digital assets in a legal manner.”
Kazakh lawmaker Azat Peruashev
The lawmaker added that in some “advanced economies,” crypto now plays “an important role in the progressive fintech industry.”
Other lawmakers appear keen on crypto reform. A speech by President Kassym-Jomart Tokayev in January this year called for the “expansion” of the country’s crypto “infrastructure.”
The President claimed that Kazakhstan needs to ensure it joins the “new technological order” and “maintains competitiveness” as crypto adoption expands on the global scene.
Other Lawmakers Also Keen on Crypto Reform
The lawmaker Ekaterina Smyshlyaeva also proposed regulatory reform, suggesting decriminalizing crypto trading for individuals, “provided that they use licensed platforms.”
However, she also called on the government to “tighten control over the activities” of licensed crypto operators.
Smyshlyaeva agreed that crypto exchanges should be “brought into the legal sector.” She concluded by calling for a review of the laws that govern “criminal offenses related to cryptocurrencies.”
Kazakhstan: A Changing Stance on Crypto
Kazakhstan has a somewhat ambiguous relationship with crypto. Its crypto mining sector grew rapidly in the early years of this decade.
However, massive power outages in 2022 saw the government impose restrictive new measures on industrial miners.
Regardless, Bitcoin (BTC) mining players continue to retain an interest in the country, due in no small part to its famously low energy prices.
Earlier this week, the miner Canaan announced it had made “strategic mining reallocation decisions” that included adding 0.27 EH/s of hash rate in Kazakhstan.
Citizens are not completely banned from making crypto transactions in Kazakhstan.
However, the law requires that all crypto transactions must be carried out on platforms that operate within the confines of the Astana International Financial Center (AIFC).
A number of crypto operators have successfully set up shop in the AIFC. Their number includes the Kazakh branches of international exchange players like Binance and Bybit.