Cryptocurrency exchanges, the supporting roles in Asian blockchain, Kazakhstan, Uzbekistan, Kyrgyzstan, Turkmenistan, Tajikistan, Afghanistan, and Pakistan

Cryptocurrency and blockchain technology remain a global phenomenon, with use cases in almost every corner of the world. Digital technology has become so popular that it is not only an important topic in finance but also in politics and governance.

The seven “Stans” of Central and South Asia—Kazakhstan, Uzbekistan, Kyrgyzstan, Turkmenistan, Tajikistan, Afghanistan, and Pakistan—have not avoided the proliferation of digital technology. Whether it is Afghanistan using blockchain technology to revitalize its healthcare sector or Kazakhstan waiving taxes on cryptocurrency mining, the application of digital technology holds a place in these countries.

Countries’ Attitudes Toward Blockchain

Some stakeholders in these nations believe that more work is needed if the region is to reach the same level of crypto and blockchain business as East Asia and Southeast Asia.

Pakistan Government Explores Digital Policies

The State Bank of Pakistan—Pakistan’s central bank—has banned the use of cryptocurrencies in the country. Like India, local stakeholders within the crypto community are attempting to overturn this ban. Waqir Zaka, co-founder of blockchain-based venture capital startup TenUp, is one of the opponents of Pakistan’s cryptocurrency ban. Zaka appeared earlier this week before the Sindh High Court to challenge the central bank’s order.

According to local media ProPakistani, the SHC instructed the country’s Federal Investigation Agency to assist the court in understanding cryptocurrencies and to make a fair and just ruling. In a tweet Zaka posted on December 5, the High Court postponed the case until January 28, 2020. The head of TenUp also pointed out that the matter involves harassment of Pakistani miners.

The Pakistani government is actively working to lift the digital currency ban and hopes to implement strong digital policies. Prime Minister Imran Khan hosted the formation of a strategic reform and implementation team on December 5, called “Digital Pakistan,” with former Google product lead Tania Ardus serving as chair.

Reports indicate that Pakistan is also considering establishing its own sovereign digital currency. As early as this year, the State Bank of Pakistan plans to issue its own central bank digital currency (CBDC) by 2025.

Kazakhstan Mining Tax Exemption Draft

Legislators in Kazakhstan are seeking to exempt mining from taxation. Under the draft law, lawmakers hope to classify cryptocurrency mining as a “pure technological process” for tax purposes. Under this specific draft, taxes are only required when miners convert their virtual currency into fiat currency. The draft also intends to define cryptocurrency mining as a legal activity within the country.

The proposed tax law is the latest example of Kazakhstan’s recent generally positive attitude toward cryptocurrencies and blockchain. Regarding this, Madi Saken, senior legislative coordinator at the Kazakhstan Blockchain and Data Center Industry Development Association, explained that the country has not considered taxing mining activities and said:

“However, in cases where computing hardware is used for digital mining services at mining farms, mining will still be regarded as a corporate activity. Like other data center services, farms will receive statutory income based on commercial contracts, and taxation will be similar to that of typical data centers.”

Regarding the legal status of digital currencies in the country, Saken revealed that the government has no clear stance on digital assets. However, he pointed out that the Astana International Financial Center has established a special regime for digital currencies based on its independent legislative privileges. The association’s coordinator also told Cointelegraph that the government is considering a draft framework for digital assets. As early as 2018, the country’s central bank called for banning crypto trading and mining.

Transforming Afghanistan’s Healthcare Sector with Blockchain

Afghanistan has seen some practical applications of blockchain technology in healthcare and urban development. In November 2019, the country’s Ministry of Public Health signed a memorandum of understanding with blockchain startup FantomOperations. The memorandum aims to promote the deployment of blockchain-based solutions in the country’s health sector. The main focus of the project is to combat the spread of counterfeit drugs and digitize patient and hospital records. In a statement issued at the time, the ministry announced:

“The Ministry of Public Health is committed to establishing an electronic government system in the health sector, and blockchain technology will help improve transparency, efficiency, and effectiveness in related affairs.”

Earlier this year, the United Nations also announced plans to use blockchain-based solutions to promote urban development projects in Afghanistan. This move is part of the UN’s “Cities for All” initiative, with the goal that by 2034, these cities will become blockchain-focused urban centers.

Blockchain in Other Countries

In Kyrgyzstan, authorities seem to be cracking down on miners. In September 2019, due to energy officials accusing mining farms of abnormally high electricity consumption, services to 45 cryptocurrency mining centers were cut off from the national grid.

Despite a ban on digital currencies implemented in 2014, miners have continued to establish significant operations in Kyrgyzstan due to its cheap electricity. However, reports indicate that authorities are seeking ways to regulate the industry, claiming that mining has not yet been legislated under federal law.

It is reported that the draft law is considering two approaches to the proposed mining tax system—taxing either income or expenses. Since cryptocurrency mining is popular in the country, the introduction of this tax law could earn the government nearly $4.2 million annually.

In Uzbekistan, the government increased electricity prices for mining by 300%. Energy officials stated that this move was to encourage consumers to use electricity more rationally. Cryptocurrency trading remains legal in the country, and participants enjoy tax incentives. However, foreign entrepreneurs can only operate in Uzbekistan after establishing a local subsidiary.

Overall, the Uzbek government holds a positive attitude toward digital technology, especially blockchain. As early as September 2018, the country created Digital Trust, a national blockchain fund dedicated to using this technology in government projects across sectors such as education and healthcare.

“Based on the experience of financial institutions, the National Bank warns Tajikistan citizens to be cautious of the risks when using Bitcoin,” said the Tajikistan National Bank in a reply to Radio Free Europe/Radio Liberty.

While the Tajikistan government seems to ignore blockchain technology, some blockchain projects exist within the country. Specifically, in June 2017, a Hong Kong-based blockchain startup Bitspark collaborated with the United Nations Development Programme to research blockchain remittances and explore the feasibility of improving financial inclusion in Tajikistan.

Research by Bitspark indicates that Tajikistan remains a financially underdeveloped country, with an estimated 85% to 90% of the population lacking formal bank accounts. Instead, they rely on alternative services for domestic and international payments, and blockchain has made some progress in this area.

Turkmenistan appears to have no active developments in blockchain at the moment. Even if it can’t be a leading actor, occasionally stepping in as a “stand-in” is also fine—every part of the global blockchain scene counts!

This is the current state of blockchain development in these “Stans.” Interested friends can explore further. Blockchain is a revolution—whether to join the wave of reform or watch from the sidelines depends on your ability. If you’re afraid to embrace new things, you will never be the protagonist! **$DOOD **$RDAC $SOON