Kazakhstan’s financial institutions banned from using Bitcoin

Kazakhstan’s financial institutions have been banned from using Bitcoin, Yerlan Ashykbekov, Head of the Payment Systems Management Department of the country’s Central Bank, told in an interview for Tengrinews.kz.

Bitcoin uses peer-to-peer technology to operate with no central authority or banks; managing transactions and the issuing of bitcoins is carried out collectively by the network. Bitcoin is open-source; its design is public, nobody owns or controls Bitcoin and everyone can take part.

According to the Central Bank’s representative, “transactions involving Bitcoin are prohibited for financial institutions (…) there is a tough national legislation to counteract money laundering and banks are not allowed to service transactions involving unidentified parties”, he said, adding that individuals should be fully aware of all the risks involved when making transactions involving Bitcoin. He emphasized the currency hadn’t been very popular with Kazakhstanis.

Earlier Kairat Kelimbetov, Central Bank Governor, said the regulator was studying the currency. “Some assert the currency is a tool of money laundering and ban it completely as an absolute evil, like in China. Others are closely monitoring the currency being used worldwide (…) there is no official position on the currency so far; however, by the end of the year we will formulate an official stance on whether it is a ponzi scheme of sort or not”, he said at a press-conference February 3, 2014.

Ruslan Dalenov, the country’s Vice Finance Minister, earlier announced that Bitcoin might pose a threat to the financial system of the country.