Kazakhstan is at a turning point with respect to the digital economy. The nation’s crypto mining industry has developed rapidly over the past few years. It paid more than $34 million in taxes within a period of three years.
Officials envision further potential. They argue that flexible standards might unlock tremendous opportunity for the country. But current restrictions restrain growth.
Computer mining farms nowadays run under strict regulations.
The government has accredited 84 companies and licensed five mining pools. However, there are just three active pools. Nonetheless, the mining activity picked up. In 2023, there have already been 415,000 units of registered mining equipment. These machines consume enormous supplies of energy.
Power deals, projects, and growth
Miners purchase electricity from private vendors, even importing it from Russia. It was initiated by Kazakhstan with the 70/30 project. It channels 70% of energy from improved power plants to the grid and keeps aside 30% for the miners.
The officials want the associated petroleum gas for electricity as well. The otherwise wasted gas can power mining farms and lower emissions. Oil companies will receive additional sources of revenue as well.
The crypto trade volume in the Astana International Financial Centre saw a huge spike. It increased from $324 million in 2023 to $1.4 billion in 2024. From next year, 75% of the miners’ assets have to be sold on the AIFC exchanges.
The authorities seek to maintain digital trade within the ambit of the law. Digital assets are divided into two categories by the law. Covering assets connect with real goods, and non-covered assets encompass Bitcoin and Ethereum. Trading should all occur within AIFC.
Crypto reform needed for growth
However, most of the market is still in the dark. In the previous year, 91.5 percent of digital asset transactions occurred beyond government oversight. Authorities closed 36 illicit exchanges, froze assets of $4.8 million, and unraveled two Ponzi schemes. They blocked thousands of websites operating illicit crypto businesses.
Experts say the nation has all the potential to head Central Asia’s cryptocurrency race. But this process requires courageous steps. Elimination of restrictions might bring investors from around the globe. Legal operations might fetch hundreds of billions of tenge as tax. It could go into schools, hospitals, and infrastructure projects.
The Digital Ministry is in favor of the extension of crypto operations beyond AIFC. It favors open exchanges and crypto ATMs. Reforms require the backing of financial regulators and the National Bank.
Together with international assistance, Kazakhstan might harness its crypto potential into national development. Time is of the essence, and the actions taken now will determine the future of the nation digitally.
