Kazakhstan Looks to Bring Crypto Exchanges to Central Asian Financial Hub

Kazakhstan is set to test a pilot project for the creation and operation of cryptocurrency exchanges in the Astana International Financial Centre (AIFC).

• The AIFC, which was launched in 2018, was designed to develop Kazakhstan's nonbanking financial sector and become a financial hub for Central Asia. According to its website, there are 1,046 companies registered there.
• The pilot will see crypto exchanges operate in the AIFC in cooperation with local banks and government agencies.
• The Kazakhstan government announced on Friday that amendments were being made to existing legislation that would prevent banking services from being used to facilitate cryptocurrency activities.
• The amendments will allow such activity to take place subject to the necessary due diligence on the origin of funds, the nature of the AIFC participants' activities, cooperation with the relevant financial authorities and so on.
• Kazakhstan became a country of some significance for the crypto industry last year as many miners relocated operations there following the crackdown in China.
• However, the relationship between mining firms and their new home became frosty later in 2021 as severe electricity shortages prompted the government to clamp down on the new arrivals. Last month,106 miners were forced to stop operations as a result of the government's crackdown.

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