IMF Staff Country Reports

Republic of Kazakhstan: Financial Sector Assessment Program-Technical Note on Regulation and Supervision of Crypto Assets

April 24, 2024

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Republic of Kazakhstan: Financial Sector Assessment Program-Technical Note on Regulation and Supervision of Crypto Assets, (USA: International Monetary Fund, 2024) accessed October 6, 2024

Summary

Kazakhstan saw a significant increase in crypto mining in 2021 following a ban on mining in China. Volatility in crypto markets and energy shortages, coupled with a prohibition on the circulation of crypto assets in Kazakhstan, reduced the size of the market by the following year. While retail and institutional crypto holdings are limited, growing public sector experiments with distributed ledger technology, a pilot project to allow the circulation of crypto in the Astana International Financial Centre (AIFC), and mandates for crypto miners to store a proportion of their mining rewards in AIFC registered exchanges has the potential to increase the size of the sector. If incentives grow for users and firms to circulate crypto, the existing prohibition – which has dampened market growth, could become untenable. Although not a regulatory priority, the broad prohibition on crypto assets should be replaced by a robust regulatory framework, contingent on market growth, upskilling supervisors, and a globally coordinated move to implementing conduct and prudential regulation.

Subject: Blockchain and DLT, Economic sectors, Financial Sector Assessment Program, Financial sector policy and analysis, Fintech, International organization, Mining sector, Monetary policy, Technology

Keywords: Blockchain and DLT, Crypto taxonomy, Financial Sector Assessment Program, Fintech, FSAP assessment's finding, Global, IMF-World Bank Financial Sector Assessment Program, Mining sector, Settlement centre, Staff team of the International Monetary Fund

Publication Details

  • Pages:

    31

  • Volume:

    ---

  • DOI:

    ---

  • Issue:

    ---

  • Series:

    Country Report No. 2024/095

  • Stock No:

    1KAZEA2024005

  • ISBN:

    9798400273599

  • ISSN:

    1934-7685

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