Kazakhstan plans to strengthen their cryptocurrency oversight in response to a $15 billion capital outflow.
Kazakhstan is tightening regulations on digital assets, spurred by a roughly $15 billion exodus of cryptocurrencies externalized due to poor regulatory oversight and the use of unregulated platforms. This was disclosed by Deputy Chairman of the National Bank, Berik Sholpankulov, during a press conference on May 22nd.
Sholpankulov explained that the absence of a robust legal and administrative structure had precipitated large capital outflows, threatening the security and transparency of citizens' digital transactions. To address this issue, the National Bank, working in collaboration with relevant state bodies, has proposed amendments to existing laws to bolster regulation and impose penalties for illegally moving funds.
The regulatory initiative comprises two principal components. The first aims to clarify the legal status, issuance procedures, and usage of digital financial assets. The second introduces a licensing scheme for service providers handling the exchange of unsecured cryptocurrencies. Additionally, a regulatory sandbox is being established to enable market participants to test innovative services and technologies within a controlled environment.
When confronted with a proposal to create a digital reserve within the National Bank for confiscated cryptocurrencies, Sholpankulov clarified that such assets are treated as property under existing legal provisions. Therefore, confiscated assets fall under the jurisdiction of the Ministry of Finance's State Property Committee, which manages their valuation, sale, and allocation to the state budget. Consequently, no separate digital reserve is envisioned under the National Bank.
Significant growth is anticipated in Kazakhstan's crypto sector, with projections of revenues surpassing $100 million and more than 923,000 users by 2025. The regulatory revamp is seen as crucial for establishing a credible and stable digital asset market within the country.
[1] Kazinform[2] Central Asia Online[3] The Astana Times[4] Kazakh TV[5] Reuters
- The licensing scheme, part of the regulatory initiative, will apply to businesses handling the exchange of unsecured cryptocurrencies in Kazakhstan.
- The amendments to existing laws in Kazakhstan aim to provide clarity on the legal status, issuance procedures, and usage of digital financial assets in the finance industry.
