Kazakhstan’s Central Bank Chairman Believes in the Potential of Cryptocurrency

Key Takeaways:

  • The National Bank of Kazakhstan’s Chairman says that they intend to extract the profit from the potential of cryptocurrency.
  • Primatov says it is too early to speak about crypto legalization by the bank.

The National Bank of Kazakhstan’s Chairman, Galymzhan Pirmatov, says that it aims to extract the profit from technologies the cryptocurrency market could provide. He made the statements during a press conference on June 7.

The Chairman, who stated that the bank is eager to explore the possibilities and potential of crypto, says,” 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(crypto potential).” While emphasizing that Kazakhstan’s central bank wants to extract the maximum profit from the innovative potential crypto offers, Primatov pointed out that it is too early to speak about crypto legalization.

While he commented on the reservations about the risks to macroeconomic stability, Primatov also reemphasized that the bank is not going to ignore the crypto market ecosystem. His statements come against the backdrop of the National Bank’s ongoing central bank digital currency (CBDC) project. The National Bank of Kazakhstan had earlier said it plans to present the results of the CBDC study to stakeholders in July 2022. According to sources, the bank plans to announce its methodology on a digital tenge by June end. The final decision on implementing the central bank digital currency will reportedly be made in accordance with that methodology before the end of 2022.

In May this year, the Kazakhstan parliament made amendments to the national tax code which suggested connecting a crypto mining tax tied to the electricity prices consumed by mining entities. Kazakhstan is one of the largest mining markets in the world and generated approximately $1.5 million of state earnings from mining in Q1 2022.

A recently released legal order also requires individual entrepreneurs and legal entities to notify regulators 30 days before starting mining activity. The recent ban on cryptocurrencies in China has made Kazakhstan a crypto mining hub leading to an 18% increase in the global Bitcoin hash rate and an acute power deficit.

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Saniya Raahath

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