The government in Kazakhstan plans to allow citizens to open bank accounts for cryptocurrencies. According to a local newspaper, citizens will be able to invest in Bitcoin, sell cryptocurrency on the exchange market.
Cryptocurrency exchanges can collaborate with banks by signing up for the project
The pilot project will run for a year and aims to allow local crypto companies to legally offer crypto investment services. It will also enable investors to buy and sell cryptocurrencies like Bitcoin securely.
The report said it was unclear which financial institutions or banks would participate in the pilot project. Cryptocurrency exchanges can collaborate with banks by signing up for the project. This can be done at Astana International Financial Centre, a major financial hub in Kazakhstan.
As part of the project, the Kazakh government also wants to evaluate the potential risks associated with investing in digital currencies. Because crypto trading has not yet been legally adopted in the country.
A reason for the experiment could be the growth of Bitcoin mining in the country
One of the reasons why the government of Kazakhstan might be interested in experimenting with cryptocurrencies could be the growth of Bitcoin mining in the country. Since September 2019, China’s share of global Bitcoin mining has dropped by nearly 30% and now accounts for less than half of the total network capacity. This change made the share of mining in Kazakhstan grow by six times and become the third-largest producer of cryptocurrency in the world. Right now, six to eight percent of the world’s mining volume is concentrated in Kazakhstan.
Another reason for implementing a secure cryptocurrency exchange is fraud. There are cases where Kazakh investors buy into a Ponzi scheme or other types of scams instead of a real cryptocurrency and are left with no money and a worthless coin.