Preliminary approval has been granted to crypto exchange Binance in Kazakhstan for offering trading and custody services for digital currencies.
However, the exchange has not yet completed the full application process, but the preliminary approval is already considered a huge milestone for the company in the Central Asian country.
Only recently, Kazakhstan had taken steps for regulating the crypto market in the country.
The regulatory authority that monitors the Astana International Financial Center (AIFC) in Kazakhstan is called the Astana Financial Services Authority (AFSA).
The authority has granted a temporary license to the biggest crypto exchange in the world to provide its services in the country.
The news was shared by Binance on Monday via a blog post. As per the in-principle approval, the exchange needs to complete the application process before it is granted a full license.
Once it does so, Binance would be able to run a digital asset trading facility on the AIFC platform and would also be able to offer crypto custody services.
This move comes after the financial watchdog in Kazakhstan introduced a pilot program this spring for developing and establishing crypto exchanges in the Central Asian nation.
The authorities in Nur-Sultan also allowed platforms registered with the AIFC to open accounts with local banking institutions in June.
The chief executive of Binance, Changpeng Zhao said that Kazakhstan had proven itself to be a pioneer in terms of crypto adoption and regulation in Central Asia.
He added that this temporary license was further evidence that Binance wants to become a compliance-first crypto exchange.
The CEO said that they want to offer their products and services to people in a well-regulated and safe environment all over the world.
Binance’s regional head, Gleb Kostarev said that this development was a ‘landmark achievement’ for the exchange.
He stated that they were grateful to the AIFC for granting the in-principle license approval to the exchange and for their vision and support.
Kazakhstan’s crypto industry
China launched a crypto crackdown back in May 2021, which resulted in an influx of mining enterprises in Kazakhstan.
However, there are many critics of the industry who have claimed that it does not provide any benefits to the country’s economy.
They have said that it does not create many jobs, pays very little tax, worsens the growing power deficit in the country and all profits are transferred abroad.
Therefore, this has prompted the government in Kazakhstan to shut down a number of illegal mining operations.
They have also expanded the registration requirements applicable for crypto miners and also hiked up the electricity surcharge that has to be paid for energy consumed for crypto minting.
Moreover, crypto companies have also been provided options for using domestic platforms to exchange their digital currencies.
AFSA’s chief executive, Nurkhat Kushimov said that clear and well-managed rules are required by investors who are seeking new markets.
The CEO said that the work of Binance would help promote the digital asset industry locally.