The central bank of Kazakhstan has given the go-ahead for a project to issue crypto cards allowing users to spend digital coins where fiat is accepted.
The pilot is part of a series of initiatives aimed at expanding cryptocurrency circulation in the country, including the issue of a stablecoin and the tokenization of assets.
National Bank of Kazakhstan starts crypto cards project
The monetary authority has announced the launch of a pilot that will provide citizens of the Central Asian Nation with the opportunity to spend their cryptocurrencies practically anywhere regular payment cards are accepted.
The news came from a meeting in Almaty, Kazakhstan’s largest city, during which the central bank discussed upcoming projects to offer financial services based on digital assets with representatives of commercial banks, crypto exchanges and fintech companies.
Participants reviewed the progress made in implementing President Kassym-Jomart Tokayev’s directive to develop the country’s digital asset industry. His order resulted from Astana’s decision to expand rather than restrict the circulation of cryptocurrencies.
Discussions focused on the status of various projects to introduce financial services based on digital assets and to tokenize other assets. Officials also considered the integration of such assets into the traditional financial system and the development of relevant regulations.
The crypto cards will be linked to wallets hosted by licensed providers of digital asset services like the cryptocurrency exchanges registered at the Astana International Financial Center (AIFC), the National Bank of Kazakhstan (NBK) explained in a press release.
Thus, users will be able to make non-cash payments at merchants accepting fiat, using the balances of their crypto wallets. The digital coins will be instantly converted to local currency, and settlements will be processed by crypto platforms and commercial banks working together.
The NBK insisted:
“This solution provides the ability to safely and conveniently integrate the circulation of digital assets into the existing payment infrastructure.”
“The ‘crypto cards’ mechanism provides for the sale of the client’s digital assets on the AIFC crypto market at the time of the payment transaction,” the regulator elaborated, noting “in fact, the payment will be made using real money after the immediate sale of the crypto assets.”
Kazakhstan plans to issue a stablecoin and tokenize assets
The government of Kazakhstan has a number of other crypto and fintech projects in the pipeline this year. The NBK revealed these include the issue of a stablecoin secured by the national currency in both its original form and the digital tenge.
Authorities in Astana also plan to tokenize financial assets, real estate and issue digital versions of regular securities. The central bank said it wants to set up systems facilitating the storage of collateral for digital financial assets and organize exchange and storage services for cryptocurrencies.
Kazakhstan has been a major Bitcoin mining hotspot for years, but it has, until recently, maintained a quite conservative approach regarding its growing crypto sector. The crypto cards launch comes after taking other steps to relax the country’s crypto policy in the past months.
The NBK highlighted:
“Together with interested government agencies, the National Bank has drafted legislative amendments to ensure the expansion of the turnover of unsecured digital assets and the creation of a regulatory framework for digital financial (secured) assets.”
In May, the monetary authority announced that crypto trading will be legalized outside the jurisdiction of the AIFC hub through a licensing regime for cryptocurrency exchanges. Also, last month, President Tokayev unveiled a plan to test crypto payments in a pilot zone called “CryptoCity.”
In the past three years alone, Kazakhstan has received $35 million in taxes from the crypto mining industry. But according to its Deputy Minister of Digital Development Kanysh Tuleushin, the country can potentially collect 10 times more annually if it adopts favorable crypto rules.
