Kazakhstan may allow banks to open cryptocurrency accounts, according to reports

Kazakhstan’s government is expected to enable financial institutions to provide banking services to cryptocurrency exchanges in the nation, making crypto transactions easier.

Local banks will service cryptocurrency exchanges.

The Astana Times reported that crypto-based firms would soon be able to open bank accounts, citing the Data Center Industry and Blockchain Association of Kazakhstan as a source.

Cryptocurrency exchanges will be required to register with the Astana International Financial Center, according to the article (AIFC). The AIFC, a financial hub based in Nur-sultan, intends to establish a trial operation in Kazakhstan with second-tier local banks.

The pilot project, which will run for a year, would allow banks to provide services to cryptocurrency exchanges, allowing investors to purchase and sell bitcoin and other cryptocurrencies. The Kazakhstan government will also use the pilot to assess the advantages and dangers of crypto assets.

Meanwhile, in Kazakhstan, the usage of cryptocurrencies and other digital assets is now prohibited. However, some industry analysts and watchers anticipate that the government would abolish the restriction after completing the pilot project.

Kazakhstan is the world’s third-largest mining powerhouse.

The most recent development coincides with the country’s growing interest in cryptocurrency mining. As a result, the government contemplated injecting $700 million into the country’s domestic cryptocurrency mining business in September 2020.

Following China’s ban on bitcoin mining, mining businesses have relocated to more welcoming nations such as the United States and Kazakhstan. BIT Mining, a Chinese bitcoin mining business, sent the first batch of mining devices to Kazakhstan in June.

Before the beginning of July, the firm intended to ship two more batches. BIY Mining also stated in May that it would invest over $9 million in Kazakhstan’s Data Mining Center’s development.

Meanwhile, the Central Asian country’s proportion in worldwide bitcoin mining has increased. As a result, Kazakhstan has risen to the third position on the worldwide mining power share, according to statistics published earlier this month by the Cambridge Bitcoin Electricity Consumption Index (CBECI), following an almost six-fold increase.

In September of this year, the country’s share was only 1.4 percent. In April 2021, however, the proportion increased to 8.2%.

China’s share of bitcoin power fell from 75.5 percent to 46 percent within the same period. Meanwhile, the United States increased its market share from 4.1 percent to 16.8 percent, putting it in the second position.

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