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Kazakhstan’s government has adopted laws to regulate relations between local crypto exchanges and financial institutions, including allowing registered exchanges to open bank accounts in Kazakhstan.

Cryptocurrency exchanges are forming partnerships with local banks

Crypto exchanges registered at the Astana International Financial Center (AIFC) have been awarded official approval to use banking services from Kazakhstan’s second-tier banks as part of a pilot effort to turn the country into a crypto center. A group of delegates from the Ministry of Digital Development, Kazakhstan’s central bank, financial regulators, and financial and digital asset industries members voted to pass the legislation. The pilot project, which will continue until the end of the year, would allow crypto exchanges to work with second-tier banks in the country to manage and operate digital assets.

A successful pilot program could result in new legislation

The pilot project will also control digital currency trading to protect both stores and professional investors. The federal government intends to monitor the pilot project’s results closely. If the implementation is successful, the government plans to change the AIFC’s guidelines. The AIFC Financial Services Regulatory Committee is now overseeing all fintech activity in Kazakhstan, including exchanges looking for a license. AFSA Director Nurkhat Kushimov, on the other hand, has indicated that the goal is to create an atmosphere that makes it easier for trustworthy and reliable businesses to operate.

Authorities Are Considering Alternatives to Mining

The commencement of the pilot program to test crypto exchanges comes only days after Kazakhstan’s National Bank Chairman, Galymzhan Pirmatov, said in a news conference that the authorities had spent time studying the crypto industry. In addition, Binance CEO Changpeng Zhao (CZ) recently visited Kazakhstan to meet President Nursultan Nazarbayev to discuss Kazakhstan’s crypto strategy.

After China’s countrywide crypto ban was enacted last year, Kazakhstan was one of the countries that welcomed Chinese BTC miners with open arms. The Chinese mining migration helped the country the most. However, the country’s energy supply was straining under the weight of expanding mining activity, and the government considered using nuclear power to alleviate the problem.

Kazakhstan is eager to establish itself as a crypto hub

However, the country does not intend to confine its crypto economy to mining. Bagdat Musin, the Minister of Digital Development, emphasized that the government needs to build a well-rounded crypto business to ensure that the cryptos mined using the country’s electricity are exchanged on local exchanges, and the revenue stays in the country.

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