Kazakhstan’s National Bank is considering banning cryptocurrency use, exchanges, and mining, saying virtual currencies are an ideal vehicle for fraud, money-laundering, and tax evasion.
"In Kazakhstan, the National Bank is taking a very conservative approach toward the matter, and it welcomes nothing but extremely tough restrictions," Daniyar Akishev, the chairman of Kazakhstan’s National Bank, told Sputnik News.
Akishev continued: "We want to ban the exchange of digital currencies for the national currency. We want to prohibit the stock exchange’s activities in this area, as well as every type of mining."
Akishev said the National Bank is considering the ban to protect its citizens from scams and fraud. "Digital currencies are an ideal instrument for money-laundering and tax evasion," he said.
Akishev conceded that regulators can't control if Kazakhstanis trade cryptocurrencies in cross-border transactions, but it can ban crypto mining within the Central Asian country's borders.
"We minimize the risks related to the national market. However, no central bank has all the instruments to control this market in the cross-border market. Therefore, at least, we must prevent this risk via the national currency."
Kazakhstan's tough anti-crypto stance follows a similar move by the Russian government. In early March, the Russian Ministry of Finance drafted a law that will criminalize the use of digital currencies as money substitutes, citing the need to protect the Russian ruble.
Russia: Crypto Is No Substitute for the Ruble
Alexei Moiseev, Russia's deputy finance minister, made the revelation during Vnesheconombank's conference.
Elvira Nabiullina, head of the Bank of Russia, said the Russian Finance Ministry opposes the use of cryptocurrencies "as private money and money surrogates."
"This is necessary to protect the ruble as the single legal [means of] payment in Russia. There is the ruble, and everything else is a surrogate."
Russian president Vladimir Putin said cryptocurrency regulation will be rolled out by July. While he has expressed concerns about cryptocurrencies because they're not backed by a central bank, the Russian government plans to launch its own digital currency called the CryptoRuble in a bid to circumvent U.S. economic sanctions.
In October 2017, Putin expressed skepticism about crypto, saying they can be exploited for money-laundering and other illegal activities. But he conceded that cryptocurrencies “are becoming or have already become a full-fledged means of payment, as well as a means of investment” in other countries.
Many bitcoin evangelists actually welcome regulatory crackdowns on scams and fraud, saying they will root out bad actors and help legitimize the currently-unregulated virtual currency ecosystem.
Featured image from Shutterstock.