Kazakhstan is looking to regulate and welcome the cryptocurrency industry as it recently presented its first draft law on cryptocurrencies.
The Central Asian nation’s recent draft law which seeks to provide the proper framework for crypto regulation covers the areas of cryptocurrency mining and circulation of cryptocurrencies.
Crypto mining in the country has been without proper surveillance
Kazinform, an international news agency based in Kazakhstan, first reported the development Thursday. According to the report, the crypto draft law was prepared by deputies of the Kazakh Mäjilis. The Mäjilis is the lower house of the parliament of Kazakhstan.
Speaking on the bill, a member of the Committee for Economic Reform and Regional Development of the Mäjilis, Smyshlyaeva Ekaterina Vasilevna shared more insight on the nature of the bill, its necessity, and the growing need for proper regulation within the crypto sector in Kazakhstan.
Furthermore, Smyshlyaeva noted that the bill seeks to address two areas of the cryptocurrency industry in Kazakhstan. The first area is the cryptocurrency mining sector which has been devoid of efficient regulation.
According to Smyshlyaeva, legalizing cryptocurrency mining without apt regulation has led to an indiscriminate exploration of the country’s energy supply. While Kazakhstan has a legislation that seeks registration of mining activities, this exercise is purely voluntary, Smyshlyaeva added.
Additionally, she highlighted the fact that the voluntary nature of the registration process has created a dearth in registered mining companies. As a consequence, only a third of the crypto mining entities in Kazakhstan have officially registered with the authorities.
Kazakhstan needs to properly regulate crypto activities
Smyshlyaeva argued that the country needs to provide a more efficient regulatory framework for crypto mining. According to her, this is because the indiscriminate use of the country’s energy for mining is affecting the energy sector. Generally, the draft law seeks to remedy this.
Notwithstanding, Smyshlyaeva also acknowledged the utility of crypto mining, as it helps bring revenue to the government via taxes. Additionally, crypto mining is a productive investment to the economy and will assist in the development of the IT sector.
There is a lack of proper regulation in the crypto mining industry in Kazakhstan. Recall that, in March, Kazakhstan shut down about 106 crypto mining firms operating illegally in the country.
Smyshlyaeva, speaking further, noted the second reason behind the presentation of the draft law.
The second is to create a cryptocurrency ecosystem on the territory of the Republic of Kazakhstan,
She pointed out the fact that the country’s present legislation proscribes the circulation of cryptocurrencies in Kazakhstan. The country only permits crypto activities within its International Financial Center. Notwithstanding, Smyshlyaeva noted that the country is also not regulating these activities through its Constitutional Law.
The draft law will be looking to address these deficiencies and ensure proper regulation in the cryptocurrency industry in Kazakhstan.
The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.