Kazakhstan Aims to Lead Central Asia in Crypto with Regulatory Ease, $34.6M in Taxes

Kazakhstan is poised to become a leading crypto hub in Central Asia, according to Kanysh Tuleushin, the country’s first vice minister of digital development, innovation, and aerospace industry. In a recent op-ed, Tuleushin emphasized that easing regulatory restrictions and promoting digital mining could position Kazakhstan as a regional leader in blockchain innovation. He suggested that lifting all restrictions and allowing digital asset trading across the country could have a significant impact, potentially adding hundreds of billions of tenge to the national budget. Tuleushin called for nationwide crypto rules, transparent exchanges, and legal crypto ATMs to support this vision.

Tuleushin also highlighted the role of crypto mining firms in modernizing Kazakhstan’s energy infrastructure. Similar to the United States, miners in Kazakhstan could help balance the power grid by consuming surplus energy. The 70/30 energy initiative allows foreign investors to fund thermal power upgrades, with 70% of the generated capacity going to the national grid and 30% allocated to miners. Additionally, utilizing associated petroleum gas from oil fields to power data centers could reduce emissions while generating revenue for oil producers. The crypto mining sector has already contributed $34.6 million in taxes over the past three years, with the government registering 415,000 mining machines, issuing 84 licenses, and accrediting five mining pools.

Despite these advancements, crypto transactions remain largely unregulated outside the Astana International Financial Centre (AIFC), with an estimated $4.1 billion in turnover in 2023, 91.5% of which took place beyond government oversight. Authorities have taken steps to address this, shutting down 36 illegal exchanges in 2024, freezing $4.8 million in assets, and disrupting two Ponzi schemes. The country is also developing an in-house central bank digital currency (CBDC), the digital tenge, with development beginning in February 2023 and an initial launch deadline set for 2025.

Kazakhstan’s efforts to become a crypto hub are part of a broader strategy to diversify its economy and reduce reliance on traditional industries. The country has already seen a surge in crypto trading on the AIFC exchange, from $324 million in 2023 to $1.4 billion in 2024. From 2025, miners will be required to sell 75% of their mined assets via AIFC platforms. This initiative is expected to attract global investors, stimulate local entrepreneurship, and foster technological advancements, positioning Kazakhstan as a key player in the global digital economy.