Blockchain, Bitcoin and IBM: Developing Cryptotechnologies in Kazakhstan

Despite the fact that Kazakhstan is among ten largest countries in the world, it was not seen on the bitcoin world map until recently. However, cryptotechnologies have fought their way to an officially recognized level.

On May 25 and 26, over the course of Astana Economic Forum 2016, a workshop on blockchain technology’s prospects in public management. The participants have been discussing issues like cost and terms of the technology’s implementation, its expected effect on public management, and main obstacles involved.

Over the course of the conference, autonomous cluster foundation Park of Innovative Technologies has partnered with IBM to implement a competence center. The parties have signed a Memorandum of Understanding concerning the establishment of a Center for Financial Technologies. The memorandum includes provisions on creating a blockchain technology center and running various educational programs on financial technologies.

The workshop held by Kazakhtelecom, local telecom services provider, featured representatives of the government, commerce, e-commerce, finance and innovative sectors.

Nurlan Meirmanov, Kazakhtelecom’s managing director for innovations, said:

“Kazakhtelecom is going to enter the market of so-called financial services indirectly, as a fintech operator. It means that, if someone uses our technological services, like TV, mobile services or internet access, they may pay for the services via available devices: order through a TV set, and pay through a phone. Moreover, they may pay not only for our services but also for our partners’.”

Speaking about blockchain technology, CEO of Almaty TechGarden Sanzhar Kettebekov noted:

“In like 20 recent years, blockchain is the most elegant solution enabling both security and transparency of information at the same time.”

Some estimations suggest, he noted, that global acceptance of cryptocurrency may save up to 20% of funds annually in financial transactions alone — mostly due to removal of intermediaries in blockchain-based systems. This means entrepreneurs may save significant amounts having eliminated banking services from the equation.

Chairman of Kazakhtelecom’s board Kuanyshben Yesekeyev added:

“Blockchain is a concept disrupting not only business technologies but the very ideology of service consumption.”

Kazakhtelecom, as the top managers claim, is willing to embrace innovations, however, it would require serious overhaul of the country’s entire communications infrastructure. The biggest problem here, however, is the fact that the country’s legislation would require even more serious reviewing.

“There are very many questions in terms of legislation,” Meirmanov remarked. “For instance, Russian Central Bank has banned cryptocurrency as a means of payment. They ban both usage and, most importantly, generation of cryptocurrency. Different countries have different approaches. Estonia, on the contrary, thoroughly studies the technology, as they want to cut expenses for the state machine.”

However, while blockchain technology is once again welcomed in the corridors of power, cryptocurrencies are far behind it in terms of acceptance. In February 2014, Kairat Kelimbetov, chairman of the financial department of the country’s National Bank, told he was feeling about whether cryptocurrency has any future in Kazakhstan as it ‘might or might not be a Ponzi scheme’, though he stressed the official department was still in the process of studying the technology.

Then-vice-minister for finance of Kazakhstan, Ruslan Dalenov, told the ministry was considering Bitcoin a threat to Kazakhstan’s banks, somewhat echoing later suggestions vocalized by government and law enforcement officials from Russia, northward of Kazakhstan.

Finally, in October 2014, Yerlan Asykbekov, then-head of department of development and management of payments systems of the National Bank of Kazakhstan, stated that local financial organizations are prohibited to use Bitcoin. However, while being mandatory for financial entities, the prohibition did not cover individuals.

Last December ForkLog reported that the country’s first BTM had been installed in Kazakhstan. At the same time, plans to launch the country’s first cryptocurrency exchange have been announced.

However, no information to confirm the exchange has been launched is available at the moment.

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