Kazakhstan's Central Bank Chairman Doesn't Understand Cryptocurrency

Daniyar Akishev, the head of the National Bank of Kazakhstan, noted the risks of cryptocurrencies and warned that they are not the best investment options. However, as the central bank chief revealed, he doesn’t understand what a cryptocurrency is.

The head of the National Bank of Kazakhstan, Daniyar Akishev, warned Kazakhstanis against the use of cryptocurrency. In his opinion, its value is based on speculative operations.

Yesterday, the central bank chief spoke during a press conference in Astana:

“So far, I do not really understand what a cryptocurrency is, even considering the professional viewpoint. This is a tool that does not have an issuer, a single centralized authority, accordingly, most likely, is not backed by anything. And its value is based solely on speculative transactions. Therefore, nobody wants to guarantee the continued safety of those assets that people invest or want to invest in this kind of cryptocurrency.”

He was concerned that citizens, who record losses because of cryptocurrency investments, can blame the government for its lack of responsibility in informing people.

“And if this bubble suddenly bursts, what will happen to the people who invested? I guess they would come to the government and ask: “Why did not you warn us about it on time?”

Akishev, using the opportunity, decided to give a timely warning:

“Therefore, I warn you now that these operations carry a risk. Moreover, we sent our proposals to the government, where we show our intention to carry out a number of tightening actions [in relation to cryptocurrencies].”

Interestingly, Kazakhstan’s President, Nursultan Nazarbayev, doesn’t show any disinclination for cryptocurrencies. A few months earlier, he even called for a global cryptocurrency.

At the Astana Economic Forum 2017, held on June 16, the President said that a global currency would help the world avoid currency wars, volatility, and speculation. He added:

“The [global] currency should have a simple, transparent mechanism and missions that are subject to its consumers. Taking into account digitalization and the development of technologies such as blockchain, such a unit of account can be created in the form of a cryptocurrency. It is important that it is not based on abstract trust, but backed by specific assets. This currency should be democratic and adopted with the participation of consumers from all over the world.”

Nazarbayev said that such a currency could be created under the responsibility of a special UN committee via a pool of central banks.

Recently, the Astana International Financial Center (AIFC) revealed plans to launch a state-issued cryptocurrency, similar to the upcoming Russian CryptoRuble.