Here’s How Kazakhstan Aims to Improve Its Legacy Crypto Trading Framework

Kazakhstan, one of the biggest in the world bitcoin (BTC) mining destinations, released a consultation paper to gauge public interest in proposed changes to improve the cryptocurrency exchange framework.

Politics paper, published on January 27, was established by the Astana Financial Services Authority (AFSA), a Kazakh regulator. The AFSA pointed out that the regulatory framework of the Astana International Financial Center’s Digital Asset Trading System (DATF) dates back to 2018 and that the amendments aim to introduce some improvements.

The AFSA analysis highlighted issues with the ongoing oversight of crypto exchanges, revealing “contradictions, ineffective provisions and uncertain definitions within the regime.” He recommended introducing risk mitigation measures on several fronts, including governance, illicit activities, custody of client funds and settlement.

Regarding the restructuring of the DATF framework, the paper recommended three options: retain the existing framework form, develop a standalone DATF framework, and treat crypto exchanges as a multilateral trading facility.

The AFSA believes that the policy recommendations will bring about several improvements, including mitigating risks to crypto operations and the industry in general. In addition, the improvements will address contradictions and unclear provisions in the existing framework. The end result, expected by the AFSA, is to create a favorable regime for crypto exchanges while encouraging innovation.

According to the guidance document, the proposed measures will have a positive impact on the crypto trading industry:

“This will collectively help create a clearer, practical, efficient, comprehensive and balanced AIFC DATF framework with high standards of consumer protection, without hampering the development of crypto exchanges.”

On a final note, the document revealed that the review of the DATF framework aligns with the “AFSA Strategy for 2022” initiative, where the development of the “Digital Assets Framework: Crypto Exchanges, STOs and DASPs” is one of the three main objectives of regulatory development. .

Related: Kazakhstan set to legalize crypto as Russians flock to the country

At the other end of the spectrum, the central bank of Kazakhstan has recommended the launch of an internal central bank digital currency (CBDC) in 2023, with a gradual expansion of functionality and commercial deployment until the end. of 2025.

In October 2022, the CEO of Binance Changpeng “CZ” Zhao revealed that the Kazakhstan CBDC will be integrated with BNB Chain, a blockchain built by the crypto exchange.