Kazakhstan, which is home to one of the most significant Bitcoin (BTC) mining operations in the world, has released a consultation paper in an effort to gauge the level of interest shown by the general public in proposed amendments that would improve the regulatory framework for cryptocurrency trading.
The Astana Financial Services Authority (AFSA), a Kazakh regulator, developed the guidelines that are outlined in the policy document that was made public on January 27. The Astana International Financial Centre has a regulatory framework in place for its Digital Asset Trading Facility (DATF) that goes back to 2018, and the AFSA pointed out that the changes aim to make some upgrades to the framework.
The research conducted by AFSA revealed “contradictions, ineffective rules, and ambiguous definitions within the regime,” which were among the issues that were brought to light as a result of the continued monitoring of cryptocurrency exchanges. It suggested implementing risk reduction strategies across several fronts, including as governance, illegal behaviour, the safety of customers’ assets, and settlement.
Regarding the reorganisation of the DATF framework, the report suggested three different options: maintaining the framework in its current form, building an independent DATF framework, and treating crypto exchanges as a multilateral trading facility.
The AFSA is of the opinion that the policy proposals will result in a number of changes, one of which will be the reduction of risks associated with cryptographic operations and the sector as a whole. In addition, the upgrades will address aspects of the present framework that are contradictory and imprecise, and they will do so. The end result, as is anticipated by AFSA, will be the establishment of a favourable framework for cryptocurrency exchanges while simultaneously promoting innovation.
The policy paper indicates that the proposed measures will have a favourable effect on the cryptocurrency trading industry, stating that “this will collectively help to create more of a clear, convenient, efficient, detailed and balanced AIFC DATF framework with high standards for consumer protection, without hindering development of crypto exchanges.”
In a concluding note, the paper disclosed that the review of the DATF framework is in line with the initiative known as “AFSA’s Strategy for 2022,” which identifies the creation of a “Digital Assets framework: Crypto exchanges, STO and DASP” as one of three primary goals for the development of key regulations.
On the other hand, Kazakhstan’s central bank recommended launching an in-house central bank digital currency (CBDC) in 2023, with a phased expansion of functionality and introduction into commercial operation until the end of 2025. This recommendation is at the opposite end of the spectrum from the previous one.
Binance CEO Changpeng “CZ” Zhao made the announcement in October 2022 that the CBDC of Kazakhstan will be merged with BNB Chain, a blockchain that was constructed by the cryptocurrency exchange.