- EURASIAREVIEW.COM - A la une - 09/Jul 23:29

Kazakhstan Sets Sights On Becoming Central Asia’s Blockchain Hub

By Aliya Haidar (TCA) -- Kazakhstan is accelerating its efforts to become a regional leader in blockchain and cryptocurrency. Among its latest initiatives is a proposal by the National Bank of Kazakhstan (NBK) to establish a state crypto reserve. National Strategy and Regulatory Evolution The NBK recently endorsed the idea of forming a national reserve of crypto assets. This was confirmed in an official response from NBK Chairman Timur Suleimenov to a parliamentary inquiry. The proposal includes creating the reserve through a subsidiary of the NBK focused on alternative investments. Mirroring practices in countries such as the United States, the reserve could be composed of confiscated crypto assets and cryptocurrencies mined with state involvement. Legislative amendments to support this move are expected. In January, President Kassym-Jomart Tokayev underscored the urgency of developing Kazakhstan’s crypto infrastructure, citing a global shift toward digital assets. Tokayev emphasized the need for a comprehensive national strategy to meet emerging challenges. Currently, legal cryptocurrency transactions in Kazakhstan can only occur via exchanges operating under the Astana International Financial Center (AIFC). Registered participants include major platforms such as Binanceand Bybit. Expanding Infrastructure and Innovation The government is also considering the creation of crypto banks, which would regulate the digital asset market, facilitate storage and transactions, and boost the financial ecosystem. These institutions are seen as critical to fostering IT sector growth and blockchain compliance jobs. There are also plans to establish a licensed national cryptocurrency exchange that would operate nationwide beyond the AIFC. In May, Kazakhstan announced the launch of a special CryptoCity zone to pilot cryptocurrency-based payments for goods and services. The following month, five banks, Halyk Bank, Forte, Freedom, RBK, and Altyn, joined a NBK pilot program to introduce crypto cards. These cards, linked to wallets on AIFC-registered exchanges, allow for the real-time conversion of crypto into tenge for payments and cash withdrawals, including at physical retail terminals. Mining: Prospects and Pressure Kazakhstan has had a complex relationship with cryptocurrency mining. Between mid-2021 and early 2022, the country ranked third globally in Bitcoin mining, driven by low energy costs and an influx of miners from China. At its peak in January 2022, Kazakhstan accounted for 13.22% of global mining power. However, the surge in mining led to severe energy shortages. While enthusiasm for mining has returned, President Tokayev called in March 2025 for renewed investment in digital mining infrastructure. First Deputy Minister of Digital Development Kanysh Tuleushin has championed state-regulated mining as a potential revenue source and a catalyst for modernizing the energy grid. He pointed to models such as the U.S., where miners help balance grid loads, and to Kazakhstan’s “70/30” initiative, which allocates 30% of newly modernized thermal power plant capacity to miners and 70% to the national grid. Tuleushin also emphasized the potential for repurposing associated petroleum gas to generate mining power, thereby reducing emissions and monetizing a previously wasted resource. He argued that legalizing crypto activity nationwide could transform Kazakhstan into Central Asia’s crypto leader, on par with emerging markets in Uzbekistan and Kyrgyzstan. Energy Shortages and Long-Term Solutions Despite its ambitions, Kazakhstan’s energy capacity remains a critical constraint. Analysts at energyprom.kz estimate a national electricity shortfall of 5.7 billion kWh in 2025. This follows a 2 billion kWh deficit in 2024, when production totaled 117.9 billion kWh against a demand of 119.9 billion kWh. Projections indicate a surplus may not emerge until 2027, with significant new capacity planned under the Ministry of Energy’s development roadmap through 2035, including over 26 GW of additional generation. A key component of this plan is nuclear energy. Rosatom has been selected to build Kazakhstan’s first nuclear power plant by 2035-2036, with a second plant to follow under China’s CNNC. Until then, the grid remains vulnerable. The Supreme Audit Chamber, meanwhile, has warned that unregulated mining continues to burden the grid. In 2024, miners consumed 901 million kWh, worth 13 billion tenge, without oversight, exacerbating the energy crisis, according to former Prime Minister Alikhan Smailov. Tariff hikes under the “Tariff in Exchange for Investment” program have further strained households and fueled inflation. The country’s aging infrastructure, 76% of CHP plants are over 50 years old, is also a pressing concern. Regional Competition Kazakhstan faces stiff competition in the region. Uzbekistan has prioritized blockchain development, issuing 14 licenses between 2022 and 2024. Its UZnEX exchange has surpassed $1 billion in trading volume and is expanding int...