Kazakhstan Charts a Path Toward Regional Crypto Dominance
Kazakhstan is setting its sights on becoming Central Asia’s top cryptocurrency hub, with ambitious regulatory reforms and investment strategies aimed at boosting blockchain adoption and infrastructure. First Vice Minister of Digital Development, Innovation, and Aerospace Industry, Kanysh Tuleushin, laid out the country’s crypto ambitions in a recent op-ed published in Kazakhstanskaya Pravda.
Tuleushin argued that the removal of current restrictions and the implementation of transparent, nationwide regulations could position Kazakhstan as a dominant force in the region’s digital asset space. “If all restrictions were lifted and digital asset trading was allowed across Kazakhstan, the impact could be significant,” he wrote. “Kazakhstan might become Central Asia’s crypto hub,” he added, suggesting that such a move could inject hundreds of billions of tenge into the national budget.
His proposal includes the legalization and taxation of crypto trading, regulated exchanges, and the introduction of legal crypto ATMs across the country.
Crypto Mining as a Catalyst for Energy Innovation
A significant component of Kazakhstan’s crypto vision centers on digital mining and its potential to modernize the country’s energy infrastructure. Tuleushin noted that Kazakhstan, much like the United States, could leverage crypto mining to help stabilize and balance its power grid. He highlighted the 70/30 energy initiative, where foreign investors finance thermal power upgrades. Under this plan, 70% of the power generated is allocated to the national grid, while 30% supports mining operations.
Another innovative approach he proposed involves utilizing associated petroleum gas from oil fields to power data centers. This strategy could simultaneously reduce harmful emissions and provide oil producers with an additional revenue stream.
The country’s crypto mining industry has already shown tangible benefits. Over the past three years, it has contributed $34.6 million in taxes. As of 2023, Kazakhstan had registered 415,000 mining machines, issued 84 licenses, and accredited five mining pools, demonstrating its growing footprint in the global mining landscape.
Surge in Crypto Trading Through Official Channels
Kazakhstan’s Astana International Financial Centre (AIFC) has seen a sharp increase in crypto trading activity, with trading volumes rising from $324 million in 2023 to $1.4 billion in 2024. The AIFC, a financial hub designed to attract global investment, is playing a pivotal role in the country’s regulated digital economy.
Beginning in 2025, crypto miners will be required to sell 75% of their mined assets through AIFC platforms, ensuring greater transparency and boosting government oversight of the sector.
Tackling the Shadow Economy and Fraud
Despite advancements, Kazakhstan still faces a major challenge: the unregulated crypto market. In 2023, an estimated $4.1 billion in digital asset turnover occurred outside official frameworks, with 91.5% of that activity happening beyond the reach of regulators.
In response, authorities intensified their crackdown on illicit operations, shutting down 36 illegal exchanges in 2024. These actions led to the freezing of $4.8 million in assets and the disruption of two Ponzi schemes, highlighting the country’s determination to rein in unregulated crypto trade.
Building the Digital Tenge and Regional Collaboration
Looking ahead, Kazakhstan is also moving forward with its plans to introduce a central bank digital currency (CBDC), known as the digital tenge. Development of the digital currency began in February 2023, with a launch targeted for 2025. The CBDC is expected to complement the country’s broader blockchain strategy, offering a government-backed alternative to decentralized digital assets.
Kazakhstan’s crypto push comes as neighboring countries like Uzbekistan and Kyrgyzstan also warm to digital assets. On May 7, global crypto exchange Binance signed a memorandum of understanding with Kyrgyzstan’s National Agency for Investments to promote blockchain education and crypto payment infrastructure—signaling a regional shift toward digital innovation.
A Bold Vision for the Future
Kanysh Tuleushin’s message is clear: with the right regulatory changes and infrastructure investments, Kazakhstan has the potential to transform into a regional leader in blockchain and crypto finance. By tapping into the energy potential of digital mining and enforcing tighter controls on digital asset trading, Kazakhstan aims to build a transparent, innovative, and economically beneficial crypto ecosystem that can lead Central Asia into the future of finance.
