Kazakhstan grants Binance permanent license to offer digital asset services

The AIFC Financial Services Authority in Kazakhstan granted Binance a permanent license to a digital asset platform and provide custody services in the country.

After a build-up of multiple memorandums of understanding (MoU) and an initial “in-principle” approval to operate in Kazakhstan, Binance received a permanent license to operate in the country.

As of Oct. 6, the Republic of Kazakhstan’s AIFC Financial Services Authority (AFSA) granted the permanent license to both manage a digital asset platform and provide custody services at the Astana International Financial Center.

This newly acquired permanent license gives Binance official status as a regulated platform in the country. Gleb Kostarev, Asia Regional Head at Binance, said this is another step for Binance being a “compliance-focused exchange.”

Kostarev highlighted Kazakhstan’s recent efforts and activities in the crypto space:

“We welcome Kazakhstan’s drive to become a leading player in the field of new digital technologies and the cryptocurrency ecosystem.”

Binance began laying the groundwork for operations in Kazakhstan earlier this year when it signed its first MoU on May 25, through which it pledged to help further crypto adoption and regulation in the country. Followed by a second on Oct. 3 to help fight financial crime.

Related: Kazakhstan’s central bank ‘isn’t going to ignore’ the crypto market

This development out of Kazakhstan follows multiple actions by authorities to increase the crypto-related opportunities in the country. 

On Sept. 28 the president of Kazakhstan, Kassym-Jomart Tokayev, told a local news agency that if demand increases the government is ready to authorize a way to convert crypto to fiat.

In June, the Ministry of Digital Development, Innovations and Aerospace Industry of the Kazakhstan Republic launched a program that allowed crypto exchanges to open bank accounts and run legal operations in the Astana International Finance Center. 

Kazakhstan has previously held a reputation as a good place for crypto mining due to local energy prices. Over the last year, the country ramped up its power consumption reporting requirements for mining companies, along with new tax guidelines with a projected impact on the industry. 

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Binance Obtains In-principle Approval to Operate With Cryptocurrencies in Kazakhstan

Binance Obtains In-principle Approval to Operate With Cryptocurrencies in Kazakhstan

Binance Obtains In-principle Approval to Operate With Cryptocurrencies in KazakhstanCrypto exchange Binance has been granted preliminary approval to offer trading and custody services for digital assets in Kazakhstan. The exchange is yet to complete the full application process but the development has already been hailed as a landmark achievement for the company in the Central Asian nation which only recently took steps to regulate […]
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Kazakhstan to let crypto exchanges open bank accounts

Kazakhstan to let crypto exchanges open bank accounts

Exchange platforms will get an opportunity to operate legally in Astana international finance center in 2022.

In addition to its swift advances toward regulating crypto mining, Kazakhstan will launch a pilot project for crypto exchanges in the special economic zone of Astana International Finance Centre. 

The Ministry of Digital Development, Innovations and Aerospace Industry of Kazakhstan Republic announced on Thursday a pilot project of cooperation between the crypto exchanges and some of the local banks.

The working group formulated the guidelines for that cooperation, consisting of the representatives of the Ministry of Digital Development, the National Bank, the Financial Monitoring Agency, the Association of Financiers, Astana International Finance Centre and the finance and crypto market stakeholders. 

The pilot project will be functioning until the end of 2022 and include the exchanges that have gained a license from the freshly-formed Astana Financial Service Authority (AFSA). It will make a blueprint for the subsequent development of Kazakhstan as a regional crypto hub. Close guidelines should soon be published on the AIFC webpage.

Head of AFSA Nurhat Kushimov declared that the mission of his committee is to create an environment for reliable and sustainable companies to operate:

“The Astana Financial Service Authority is the only entity responsible for regulating the fintech companies’ activities in Kazakhstan. Before handing out the license to a fintech company, we conduct a deep and thorough background check, and after that maintain its constant supervision.”

Bagdat Musin, the minister of digital development, voiced Kazakhstan’s aim to profit off crypto exchanges:

“It is necessary to create a complete ecosystem, so the digital assets, that have been mined using Kazakhstan’s electric energy, would be traded at the local exchanges to the maximum extent and the profit would stay in the country”.

On May 25, the Kazakh parliament passed in the first reading the amendments to the national tax code to impose a crypto mining tax tied to the electricity prices consumed by mining entities.

Related: Bitcoin miners’ resilience to geopolitics: A healthy sign for the network

On the same day, the largest crypto exchange Binance signed a memorandum of understanding with the Ministry of Digital Development and revealed an intention to advise on developing the legislative framework and regulatory policy for crypto-assets in the republic.

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Kazakhstan’s central bank ‘isn’t going to ignore’ the crypto market

Kazakhstan’s central bank ‘isn’t going to ignore’ the crypto market

According to the chairman, the central bank will decide on implementing its own digital currency by the end of 2022.

While Kazakhstan’s government is catching up with the tremendous volume of crypto mining in the country by introducing new taxes and regulations, the local central bank intends to explore the possibilities that crypto offers. 

On Tuesday, June 7 during the press conference the chairman of Kazakhstan’s National Bank Galymzhan Pirmatov stated that the nation aims to extract the profit from technologies the cryptocurrency market could provide. He emphasized the attractiveness of innovations and made reservations about the risks to macroeconomic stability. The official doesn’t think that the bank is late to the game:

“I don’t think that the National Bank is a latecomer. Like many other banks and financial regulators across the globe, we’re watching closely and researching the question.”

Pirmatov didn’t give away any details on the bank’s possible stance on crypto and warned that it is too early to speak about the legalization, although consultations with market participants are planned:

“The approach is very simple: we aren’t going to ignore this market. We want to extract the maximum profit from the innovative potential these technologies give us.”

Related: Bitcoin miners’ resilience to geopolitics: A healthy sign for the network

The executive also revealed some news about the central bank digital currency (CBDC) project of the National Bank. According to him, the bank still intends to announce its methodology on a digital tenge by the end of June. The final decision on implementing the CBDC will reportedly be made in accordance with that methodology before the end of the year.

On May 25, the Kazakh parliament passed amendments to the national tax code in the first reading. The amendments would tie a crypto mining tax tied to the electricity prices consumed by mining entities. One of the largest mining markets in the world, Kazakhstan generated as little as $1.5 million of state earnings from mining in Q1 2022. According to the State Revenue Committee of the Ministry of Finance’s report, a significant amount of the expected fees has not been received as the government had shut down a wide number of crypto mining firms to “ensure energy security.”

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