Kazakhstan, one of the world’s largest Bitcoin (BTC) mining destinations, issued a consultation paper to gauge public interest in proposed amendments to improve the cryptocurrency trading framework.
The policy paper, released on January 27, was laid down by the Astana Financial Services Authority (AFSA), the Kazakh regulator. AFSA pointed out that the regulatory framework of the Digital Asset Trading Facility (DATF) of the International Financial Center Astana from 2018 and that the amendment seeks to introduce certain improvements.
The AFSA analysis highlights the problems related to the ongoing supervision of crypto exchanges, pointing to “contradictions, inefficient provisions and uncertain definitions in the regime.” It is recommended to introduce risk mitigation measures in several aspects, including governance, illegal activities, keeping client funds and settlement.
Regarding the restructuring of the DATF framework, the paper suggests three options – maintaining the existing framework form, developing an independent DATF framework and treating crypto exchanges as multilateral trading facilities.
AFSA believes that the policy recommendations will bring a number of improvements, including risk mitigation related to crypto operations and the industry in general. In addition, the enhancement will address the contradictions and unclear provisions of the existing framework. The end result, which AFSA hopes to achieve, is to create a suitable regime for crypto exchanges while encouraging innovation.
According to the policy paper, the proposed measures will have a positive impact on the crypto trading industry:
“This will help create a clearer, convenient, efficient, detailed and balanced AIFC DATF framework with high standards for consumer protection, without hindering the development of crypto exchanges.”
In a final note, the paper states that the review of the DATF framework is in line with the “AFSA Strategy for 2022” initiative, where the development of the “Digital Asset Framework: Crypto Exchanges, STOs and DASPs” is one of the three main regulatory development objectives. .
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At the other end of the spectrum, Kazakhstan’s central bank is proposing to launch an internal central bank digital currency (CBDC) in 2023, with a gradual expansion of functionality and introduction into commercial operations by the end of 2025.
In October 2022, Binance CEO Changpeng “CZ” Zhao announced that Kazakhstan’s CBDC will be integrated with BNB Chain, the blockchain built by the crypto exchange.