Kazakhstan: Parliament calls for reforms for comprehensive crypto trading outside special economic zone

Kazakhstan: Parliament calls for reforms for comprehensive crypto trading outside special economic zone

Crypto trading in Kazakhstan: The call for reform

In a recent political exchange, Azat Peruaşev, the leader of the minority AQ JOL Party and a member of the Majilis, the lower house of the Kazakh parliament, urged that crypto trading in Kazakhstan be exempted from the special economic zone. Despite the fact that current law only allows operations with digital assets in the Astana International Financial Center (AIFC), most crypto transactions take place in a legal gray area.

A proposal for a crypto bank

Peruaşev has suggested that the Central Bank of Kazakhstan should establish a special “crypto bank” together with the country’s private banks. This institution could provide a legal platform for cryptocurrency trading and thus regulate the supervision, exchange and storage of digital assets. He emphasizes that such a bank could take on more extensive functions and powers than is the case with conventional banks.

Need for legal reform

MP Ekaterina Smyshlyaeva also expressed her opinion and called for a revision of the regulations for digital assets. Despite the passage of the current digital assets law in early 2023, she notes that the market has changed significantly since then. In their view, a transition to the next level of regulation is necessary.

According to Peruaşev, about 90% of crypto operations in Kazakhstan are currently carried out in a legal gray area. This encourages fraud, illegal activities and tax evasion. To address these challenges, he suggests that the crypto bank should also intensify legal supervision of exchanges.

Outdated crypto laws in Kazakhstan

Smyshlyaeva also advocates for the decriminalization of digital asset operations outside the AIFC. It calls for an expansion of the infrastructure for these business activities and an increase in legal controls over the stock exchanges.

To date, digital assets in Kazakhstan can be traded through exchanges that are members of the AIFC, such as Binance and Bybit. Despite the growing interest in digital assets, few Kazakhstanis are willing to take advantage of the AIFC's offerings as they are subject to specific laws that only apply to the special economic zone.

Additionally, President of Kazakhstan Kassym-Jomart Tokayev reiterated the urgency of creating a new legal framework for crypto traders during a government meeting in January 2023. He stressed that the infrastructure for the wider legal distribution of digital assets should be established as soon as possible and that financial regulators must address the creation of an appropriate legislative framework.

Conclusion

The call for reforms in the area of ​​crypto trading in Kazakhstan is becoming louder. While the legal framework is currently considered outdated, the government is pushing for modernization that could enable legal and transparent use of digital assets. The creation of a crypto bank and reform of existing laws could help take the crypto industry in Kazakhstan to a new level while minimizing the risks associated with it.