AIFC Crypto Exchange Project Facilitates Investment, Says Project Participant 

ASTANA – One year ago, a pilot project was launched to forge interaction between second-tier Kazakh banks and crypto exchanges registered with the Astana Financial Services Authority (AFSA) of the Astana International Financial Centre (AIFC). The Astana Times spoke to Talgat Dossanov, director general of Biteeu Eurasia, one of the project participants, about the interim results. 

Talgat Dossanov, director general of Biteeu Eurasia, one of the project participants, about the interim results. Photo credit: The Astana Times.

The objective of the project is to provide crypto exchanges with access to Kazakhstan’s market and allow Kazakhstan’s residents and crypto miners to trade on the platforms of AIFC crypto exchanges, create favorable conditions for investments through fiat channels provided by second-tier banks of Kazakhstan, and amend the national legislation of Kazakhstan and the AIFC acts based on the pilot project’s results.

AFSA is the only institution in Kazakhstan authorized to regulate any activity involving the use of digital assets. AFSA was founded as an independent regulator of the AIFC to oversee the licensing, registration, and supervision of financial and market institutions, as well as the regulation of financial services and related activities in the AIFC.

Founded in 2022 in Kazakhstan, Biteeu Eurasia is the only exchange in the world to use space-based technologies for backing up client data via satellite. The company is also present in Australia and Estonia as an officially licensed digital assets exchange.

According to Dossanov, the company was the first to issue a crypto-fiat transaction as one of the first exchanges to integrate with a second-tier bank. This made it possible for customers of Biteeu Eurasia to trade and acquire cryptocurrencies in tenge. 

“We are currently negotiating to create new products with regulators, including the National Bank and our regulator, AFSA. With a new crypto-fiat product, we expect to satisfy the people of Kazakhstan and our customers soon,” he said. 

Comparing his experience in Kazakhstan to Australia and Estonia, Dossanov said communication with the regulator is the main difference. He emphasized AFSA’s client-centered approach, saying, “nowhere else have we had the chance to speak with the regulator daily by phone or email.”

“With confidence, I can say that AFSA, as a regulator, values its customers. This is a huge benefit. Because the country supports this industry, the regulator is taking all possible measures to ensure this pilot grows. Thanks to this, Kazakhstan was the first country in the region to develop in this direction,” Dossanov said. 

He said communication is more difficult in the European and Australian markets. 

“You have to write letters there. It may take a month or two before you get a response while in Kazakhstan it happens almost in an online mode,” he said. 

Dossanov addressed opportunities the pilot project presents for the country’s citizens, increasing their participation in the AIFC crypto exchanges. According to him, it reflects the engagement of the Kazakh government in fostering the crypto industry.  

“This is a significant government endeavor to make Kazakhstan the first nation in the region to develop the crypto industry, and it worked – we are the first. I consider it somewhat of an honor for us to be one of the exchanges to kickstart the cryptocurrency market in Kazakhstan. Along with the regulator and the country’s crypto community, we hope Kazakhstan will be at the forefront of the world’s crypto industry,” Dossanov said. 

It nearly happened when Kazakhstan ascended to second place in the world for Bitcoin mining two years ago due to a combination of circumstances. However, the Kazakh energy system went from surplus to deficit due to the mining industry absorbing over 7% of the country’s total generating capacity by the end of 2021. Soon after, the authorities completely disconnected miners, mostly so called “black” or “grey” miners, from the national grid, ending the boom.

According to Dossanov, this was primarily due to the lack of regulation of the crypto-mining industry and the pressure on the country’s energy capacities. 

“As a crypto-exchange, we operate under the AIFC’s legal framework. Our regulator has specific rules that we must follow. So there can be no market shocks, no one should close, and consumers will not lose money if any exchange closes since we have specific commitments to the regulator. We are subjected to ongoing audits and verification of client funds to ensure that our client’s assets are secure,” he said.

Dossanov noted that the government is aware of the challenges posed by a lack of regulation, and together with the Ministry of Digital Development, Innovation and Aerospace Industry, and the AIFC, it recently drafted a law regulating digital assets. 

“It fully regulates both mining and the operation of crypto exchanges, as well as the distribution of digital assets. As a result, it secures the entire market, establishing a legal framework in which consumers may buy cryptocurrencies safely and legally,” he said. 

Yet, Dossanov believes much work is needed, because the Kazakh market is still in its infancy. 

“Kazakhstan has only had a legal cryptocurrency industry for a year. Many events were hosted this year, and much work was done. This is just the beginning,” he said.

Dossanov advised prospective crypto exchange participants to exercise extreme caution while investing their money because many illicit players, including financial pyramids, are proposing to buy cryptocurrency. 

“It is critical to select the proper crypto exchange and the right broker, because there are many illegal actors on the market currently, these are crypto exchangers, there are many scams, where financial pyramids offer the purchase of cryptocurrency, promising incredible profits in the future. One must exercise caution in this day of information noise and the desire to generate quick cash. People should have a basic understanding of finance. Trade on licensed exchanges, or you risk losing your money instantly,” he said. 

Dossanov expects cryptocurrency to be integrated into everyone’s daily lives and become an additional means of payment in the future.

“I would like to see more businesses join crypto initiatives so that individuals may not only buy cryptocurrency but also use it when shopping or dining out. To incorporate it into our daily lives as an additional way of payment rather than a substitute or alternative to traditional money,” Dossanov concluded. 

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