09 Jan STO Checklist: What you Need to Know About Security Token Regulations In Central Asia
[Photo credit: jennyfaraway.com]
Security tokens are rapidly making their mark all across the world and the Central Asian region is no different. These tokens come with the promise of greater security for the investors since these digital tokens, unlike other cryptocurrencies, are backed by real assets such as equity or investment funds, for instance.
The following is a discussion of the regulations surrounding security tokens in Central Asia, a region that has increasingly expressed interest in activities surrounding cryptocurrency and the blockchain in general.
Security Token Regulations in Kazakhstan
Kazakhstan citizens have been fairly optimistic about digital tokens and cryptocurrencies, as is evident from several studies, which show the rising interest in crypto-related activities and the consequent increase in web searches in the region. However, the Kazakhstan government is yet to release a definitive legal framework for digital currencies and tokens. That being said, the President drew international headlines when he called for the need for “international cooperation” in drafting crypto regulations.
Daniyar Akishev, who leads the Kazakhstan National Bank, on March 30, 2018, mentioned that the National Bank holds a very “conservative” position on cryptocurrency issuance and that he welcomed strict regulations considering the need for the protection of the investors and potential frauds and scams. The National Bank head also indicated that legislative amendments to this effect had been drafted to ban the sale of cryptocurrencies for the Kazakhstani tenge, the national currency in addition to prohibiting exchanges and mining activities. However, no announcements for the enactment of such proposals were subsequently made.
The country, however, has been actively striving to emerge as a blockchain hub in the region, which was evident in the organization of major blockchain events in the capital.
Security Token Regulations in Kyrgyzstan
The Kyrgyz Republic welcomed cryptocurrency and the blockchain technology. In a report initiated by the International Finance Centre Development Agency and the Kyrgyz Stock Exchange, the country aims to create favourable conditions that could facilitate bitcoin mining and crypto trading. The report emphasizes that the republic does not intend to curb the technology as long as the interests of the citizens are protected and fraudulent activity such as money laundering kept at bay.
Tolkunbek Abdygulov, the head of the National Bank of Kyrgyzstan, in January 2018 said that the bank will not interfere with the development of the crypto market in the country while advising the citizens to invest in digital currencies at their own risk.
It must be noted that the country had banned the use of bitcoin and other digital currencies as the means of payment in 2014.
Security Token Regulations in Uzbekistan
If there’s one Central Asian country that’s truly embraced the decentralization paradigm shift, welcoming digital currencies with open arms, it has to be Uzbekistan. The country, in 2018, legalized cryptocurrencies while establishing some initial regulatory frameworks governing trading and mining activities. The Presidential decree also legalizes exchanges as long as they are licensed. Specific requirements for trading platforms were also described.
It must be noted that earlier the same year, the President had also instructed the Central Bank to work towards the development of a legislative framework for Uzbekistan.
The world is changing and it’s changing rapidly. Digital currencies in their varying forms, particularly security tokens with their numerous security benefits while also promising the versatility of cryptocurrency are now attracting governments across the world. Central Asia is fast responding, aiming to be the next big blockchain hub.