Regulation Updates

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

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

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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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