Kazakhstan has tested and successfully converted crypto into tenge, the local currency. The country is now considering regulation of the sector. This should boost cryptocurrency adoption in a country so far only known for its mining farms.
Kazakhstan opens a little more to crypto
This is it! According to Bitcoin Magazine, the first cryptocurrency purchase with Kazakhstan’s national currency has successfully taken place! Kazakhs who want to can now buy some with Tenge, the country’s official currency.
Kazakhstan’s President Kassym-Jomart Tokayev is now considering going further than converting cryptocurrencies into local currency. For the head of state, if there are security guarantees and a growing demand for crypto, cryptocurrencies could receive legal recognition.
Currency conversion is already underway at the Astana International Financial Center as part of a special pilot project. For this purpose, quite innovative changes have been made to the national legislation and regulatory environment. We are ready to go further. If this financial instrument shows its additional demand and security, then it will certainly receive full legal recognition.Kassym-Jomart Tokayev
The pilot project to which the Kazakh President refers was launched in the capital Astana in the summer and is expected to run in test mode until the end of 2022. The aim of the project, which is being conducted with Kazakh banks and AIFC-licensed cryptocurrency exchanges, is to test the possibility for citizens to access crypto through their bank accounts.
In particular, local reports indicate that Eurasian Bank and Intebix have jointly completed the first crypto purchase. This marks the first time that citizens can legally purchase crypto with the national currency.
From the Eldorado of mining to the Eldorado of crypto adoption
Kazakhstan was previously known in the industry for the mining activities taking place there. According to a report by Cambridge University, after China banned cryptocurrency mining in 2021, Kazakhstan was providing up to 18 percent of Bitcoin’s hashrate; placing the country as the second largest Bitcoin miner after the United States.
Mining-friendly authorities, cheap electricity and chilly winds have made Kazakhstan a mining El Dorado.
However, cryptocurrency mining still hasn’t been without constraints in the country. Kazakhstan has experienced a major energy crisis often blamed on bitcoin miners.
In October 2021, the Kazakh electricity company accused bitcoin miners of being partially responsible for a power outage at Ekibastuz-1, the country’s largest power plant. Several Kazakhs then raised their voices, accusing bitcoin miners of plunging the country into darkness. Protests were even organized in the capital and the rest of the country.
These protests led to the passing of a new law allowing the Kazakh electricity company to significantly reduce or even cut off power to mining farms. Unsurprisingly, these restrictions led to the departure of several mining companies to more favourable states.
Legally recognizing the purchase of cryptocurrencies via the local currency reveals the willingness of Kazakh authorities to promote their use in the country. Is it on its way to go from being a mining Eldorado to a land of crypto adoption? Time will tell, but 2022 is more than ever the year of Adoption.
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