Have you noticed how many countries, which have never really been ‘hyped’ in terms of crypto adoption and financial development, are now considered to be blockchain technology hubs? Estonia, Slovenia, Belarus…the list is permanently expanding.
Now, it would seem that it’s time for the countries of Middle Asia to enter the game. While many of the so-called ‘big boys’ adopt a fairly cautious approach to the regulation of cryptocurrencies, several Asian countries – including Kazakhstan, Uzbekistan and Kyrgystan – seem happier to implement more supportive, optimistic laws and regulations.
However it’s not just local regulators, but local banks too, which have become aware of the need for blockchain adoption.
After reading this article you’ll definitely have learnt something new about this Central Asian trio, as they attempt to position themselves at the forefront of blockchain technology adoption. So, let’s get this ‘crypto journey’ started.
Kazakhstan is trying to become the region’s main crypto hotspot. In May, Kazakhstan’s President Nursultan Nazarbayev called for global cooperation on crypto regulation. At the plenary session of the Global Challenges Summit 2018 he stated the following:
The blockchain hype hasn’t passed by Kazakhstan’s Ministry of Finance either, who has started researching blockchain. In April, he announced the launch of a blockchain-powered database that will be designed to eliminate ‘grey schemes’.
Furthermore, in June 2018 Kazakhstan hosted one of the largest conferences dedicated to distributed ledger technology – the Blockchain Conference Astana – which was supported by public authorities and the Kazakh Association for Blockchain and Cryptocurrencies (KABC). 25 speakers from the UK, USA, Canada, Russia, Belarus and Kazakhstan, as well as over 200 participants from various sectors of the economy discussed the hottest industry topics, including the prospects for decentralized technologies in Kazakhstan.
Recently, Uzbekistan’s government introduced a number of supportive regulations. The country now legally recognizes crypto trading and mining, while providing local crypto traders with exemptions from taxation.
One of the latest crypto laws enacted in Uzbekistan was a decree dedicated to building a digital economy, two key facets of which are the adoption of blockchain technology and the development of a friendly regulatory environment for crypto. Signed by the country’s president Shavkat Mirziyoyev in July, the law came into force on September, 2.
Local media Gazeta.uz recently published the key goals mentioned in the decree. They are as follows:
- To adopt and develop cryptocurrency-related activity, including mining, issuance, exchange, storage, distribution, management, and consulting related to virtual currencies.
- To implement blockchain technology, smart contracts and to support ICOs in order to diversify the various methods of investment and entrepreneurial activities.
- To train blockchain developers; to cooperate with entities from foreign crypto and blockchain markets; to attract international experts in order to build and implement joint projects with local firms.
- To create a legal framework for blockchain considering the best practices of crypto-friendly countries.
Massively significant, isn’t it? And that’s not all – in September, President Mirziyoyev also ordered the establishment of a state blockchain development fund named “Digital Trust”. The fund’s principal aim is to integrate blockchain into local industries including healthcare, education, and cultural areas.
Interestingly, Kyrgystan is one of those countries which were initially against cryptocurrency. It banned cryptocurrencies back in July 2014, following the National Bank’s statement warning that the use of virtual currencies is illegal.
But fast forward to today and Kyrgyzstan is one of the most financially developed and crypto-friendly countries in the region. A report, published by the law firm John Tiner & Partners on behalf of the country’s International Financial Center Development Agency (IFCDA), demonstrates that the nation is now proposing more accommodative approaches.
According to the report, there are almost no restrictions in Kyrgyzstan when it comes to crypto trading and mining. ICOs are also allowed to be deployed freely in the country. The only restriction is that those involved in the crypto trading must pay established taxes.
Valery Tutykhin, head of the IFCDA, stated:
“Our local investment market infrastructure can be used to legally invest into any crypto-assets. Does someone want to buy cryptocurrencies? Let him do it through the local commodities exchange, considering that he will pay local taxes. Does someone want to raise capital for a startup through an initial coin offering? Let him do it through the local stock exchange. Its listing rules are not so complex”.
These countries are a textbook example of how a nondescript region can become an epicenter of blockchain development, without hype and often while going unnoticed. It is hoped that the absence of regulatory uncertainty in the aforementioned countries will give crypto and underlying decentralized technologies a powerful impetus in this region.
As promised, our next article will be dedicated to the ‘big boys’, including China, the US and the UK. Stay tuned!