Major Problems of the issue
Different cryptocurrency exchanges can offer various types of cryptocurrencies and have different terms, policies, payment methods, and fees. Exchanges also differ on aspects such as security, user-friendliness, functionality, and design. These factors can all play a significant part when choosing the most suitable exchange.
Security
Exchanges are essentially so vulnerable to hacks because they centralise the risk, so further decentralisation can be an option in the pursuit for maximum security. Security is indeed an urgent and weighty matter. Coin Desk reports that each day, $2.7 million is stolen from exchanges, with the amount of cryptocurrency taken in 2018 having increased 13 times compared to the previous year. This amounts to $2.7 million in crypto assets being stolen every day, or $1,860 each minute.
Transparency
The lack of transparency, accountability and professionalism from renowned institutions can poison the benefits of digital currencies and undermine the strength and influence of blockchain adoption in different industries beyond finance. True blockchain believers call for an end to sketchy practices in the financial system and market structures, promoting widespread professionalism and ethical standards.
Credibility
Initial Coin Offerings are a great way to attract investors, but part of them resulted to be scams. Exchanges need to be careful and strict enough only to list those crypto coins which are reliable and ensure that the right assessment is performed.
Liquidity
Liquidity is a vital element for any of the market. A lack thereof creates an imbalanced environment, and things go out of control. Due to the decreased liquidity, orders are not placed/executed on time, and the doors are open for large holders to manipulate prices.
Additionally, with a lack of liquidity, markets become more volatile and see more price slippages.
Regulation
In light of these flaws and loopholes, and continuing cases of hacks and breaches of exchanges, regulations would be welcomed if tailored to ensure transparency and consumer protections. Crypto experts have anticipated 2019 is on track to be the year of crypto regulations In January, two major European regulatory bodies, the European Banking Authority (EBA) and the European Securities and Markets Authority (ESMA) have publicly called for better assessments of crypto technology and its impacts to develop appropriate regulations.
Stance of Kazakastan on Cryptocurrency
Kazakhstan has seen a significant growth in cryptocurrency mining activities with around
$200 million having been already invested in 13 mining farms that are operational around the country with four more under construction. According to the Minister of Digital Development, Innovation and Aerospace Bagdat Musin, the cryptocurrency mining industry is expected to attract investments worth 300 billion tenge ($700 million) in the coming years, which could be increased to 500 billion tenge ($1.2 billion) by 2025. While cryptocurrency mining is a relatively new industry to the country, Kazakhstan has reportedly accounted for 6.17% of the global mining hash rate, the measure of computing power to validate Bitcoin blockchains, after China (65%), the United States (7.24%) and Russia (6.9%). First attempts at developing the crypto industry in Kazakhstan started in 2017, when the Astana International Finance Center (AIFC) announced it would cooperate with the EXANTE, an investment company, to promote blockchain operations and cryptocurrency market in the country. As the governor of the AIFC Kairat Kelimbetov also put it, “cryptocurrencies are entering the mainstream of today’s economic reality” and “the AIFC can become an international hub for development of the digital assets market.” However, while this new industry has generally been welcomed, the lack of a clear regulatory environment as well as the novelty of the industry led to skepticism within some government agencies toward viability and security of the cryptocurrency market.
Things started to shift in favor of Kazakhstan’s crypto industry. On June 25, 2020, president Kassym-Jomart Tokayev signed a law that introduced amendments to the regulation of digital technologies and legitimized mining. Such key definitions as “digital asset”, or cryptocurrency, and “digital mining” were also introduced into the law “On Informatization.” Kazakhstan might become a key player in blockchain technology development in Central Asia. The introduction of the crypto mining industry across a wide range of sectors, including finance, agriculture, and healthcare, is expected to provide benefits for both the government and general population
also greatly facilitate a shift to digitization, which still remains a key priority on the government agenda, especially after the COVID-19 pandemic has underscored the importance of contactless operations and transactions.
Based on the aforementioned, this paper proposes to convene an international confer- ence on the development and adoption of the manuscript of international convention that would regulate relations on the use and circulation of cryptocurrency. The rules of this conven-tion must put an end to the question of the recognition or non-recognition of cryptocurrency as a legal tender. To frame a clear mechanism for its turnover, it is important to provide mecha- nisms for bringing to justice individuals for illegal operations with it. The security of transactions using cryptocurrency should be provided by a supranational structure. For example, it would be effective to create an authorized inter-national one that would exist isolated from existing international financial institutions. We believe that it is a new, independently functioning international organization that would be able to contribute more effectively to the development of cryptocurrency
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