A legislator from Kazakhstan has called on the country to develop a “crypto bank” to moderate digital asset trading.
Despite being a block reward mining haven, Kazakhstan has restricted digital asset activities to the Astana International Financial Center (AIFC), a special economic zone. However, according to Azat Peruaşev, who leads the minority Aq Jol party in the lower house of Parliament, investors have been trading on unregulated platforms outside the AIFC.
He argued that 90% of digital asset activities in the country are conducted outside the confines of the AIFC. This leaves the investors vulnerable to scammers and denies the government oversight, allowing for illegal activities such as money laundering and tax evasion. Additionally, investors trade on offshore platforms, leading to billions of tenge flowing out of the Kazakhstan economy.
Peruaşev believes the best approach is a national ‘crypto bank.’ In a formal inquiry to Prime Minister Olzhas Bektenov, he proposed that the Kazakh central bank should take the lead on the project, with commercial banks also participating.
“…an effective tool for regulating the industry could be the creation of a cryptobank – an institution that will take on the functions of control, exchange and storage of digital assets in a legal field,” he stated.
He argued that in advanced economies where digital assets have been allowed to thrive, like the United States, such initiatives have been successful. He pointed to Anchorage Bank and Custodia Bank, two digital asset-focused banks operating under the oversight of federal regulators. In Switzerland, Sygnum Bank and SEBA Bank have also been successful, he added.
“If something can’t be resisted, there’s only one solution, engage and lead. In this case, that means legalize and regulate.”
However, Peruaşev’s proposal differs from the successes in the U.S. and Switzerland, where the ‘crypto’ banks are private entities. The lawmaker proposes a government initiative spearheaded by the central bank. This would be similar to a national digital asset exchange proposed in Russia last August, which has yet to launch.
Still, other lawmakers supported the proposal. MP Ekaterina Smyshlyaeva said that the ‘crypto’ bank would offer legal clarity to Kazakh investors, while calling on regulators “to better understand the nature and dynamics of the industry.”
The two lawmakers’ message is similar to President Kassym-Jomart Tokayev’s, who called for a new digital asset framework for digital asset traders “on an urgent basis” in January.
Watch: History of Bitcoin with Kurt Wuckert Jr.
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