Kazakhstan Senate Signs Legislation to Regulate Digital Asset Service Providers

The Kazakhstan Senate has passed a bill that solves many financial-related challenges in the country, including the broad oversight of digital currencies. According to the local news channel, VLast, crypto service providers in the country will now be subjected to Anti Money Laundering (AML) and Know Your Customer provisions in order to mitigate the risk of terrorist financing.

“Today, persons issuing, organizing trading of digital assets, as well as providing services for the exchange of digital assets for cash, valuables and other property, are outside financial monitoring, which contributes to the spread of crimes in the field of money laundering and terrorist financing, including including the shadow economy, it stimulates malefactors, including terrorists, to use electronic assets in mutual settlements, ” said Senate Deputy Olga Perepechina.

Kazakhstan remains one of the growing and prominent digital currency hotspots in the world, a recognition it received as a tax haven for miners. With the new legislation, the established Institute of Public Officials will wield powers that will extend to the crypto ecosystem and stakeholders providing services in the country.

Should the new provisions be approved by the country’s President, Kassym-Jomart Tokayev, both new and old crypto service providers will need to apply for licensing with the Institute of Public Officials.

Kazakhstan Fast Rise to be Tempered Down?

With the new regulation and more to come, the fast rise of Kazakhstan as the second biggest nation in terms of Bitcoin mining hashrate after the United States may soon be tempered down. While the country is amongst the biggest beneficiaries of the Chinese crackdown on Bitcoin mining, which pushed mining operators to the country, the trend may soon be tapered down.

According to media reports, President Tokayev is wary of the country’s declining electricity source and is calling for the regulation of Bitcoin mining. This stance will perhaps save the country’s powers from being excessively exploited as it ranks as one of the nations with the cheapest power in the world.

Digital currency legislation is a growing trend in various countries around the world. Despite the call for regulations, Kazakhstan hopes to pull in about $1.5 billion within the next five years.