Kazakhstan's Bold Move: Crypto Mining to Power Up Energy and Expand Trading

Kazakhstan is not holding back! They're ready to turbocharge their energy system with digital mining and blast crypto trading out of the Astana International Financial Centre zone!

In a fiery op-ed in Kazakhstanskaya Pravda, Kanysh Tuleushin, the First Vice Minister of Digital Development, Innovation and Aerospace Industry, laid out the government's sizzling strategy. They're going to use digital mining to supercharge the country's energy infrastructure and crank up efficiency. Under the scorching "70/30" model, foreign investors will pump cash into upgrading thermal power stations. Get this—70% of the new energy juice will go straight to the national grid, and 30% will fuel those mining rigs!

Tuleushin isn't just throwing ideas around; he's drawing inspiration from the U.S., where crypto miners gobble up excess electricity during low demand, keeping the grid in check. He's convinced Kazakhstan can pull off the same stunt, using mining farms as the secret weapon to keep the energy system rock-solid.

But wait, there's more! Tuleushin's got another ace up his sleeve—using associated petroleum gas, the stuff usually wasted or flared during oil production, to power mining farms. It's a win-win: less environmental impact and new cash flows for oil producers!

And the numbers? Digital mining has already raked in $34.6 million in tax revenue over the last three years. Since 2023, Kazakhstan has registered a whopping 415,000 pieces of mining equipment, issued 84 licenses, and given the green light to five mining pools. This sector is on fire!

But that's not all—Kazakhstan's got its sights set on expanding crypto trading regulations across the entire country, not just the AIFC zone.

Crypto trading at AIFC exchanges has exploded from $324.2 million in 2023 to a staggering $1.4 billion in 2024. But hold onto your hats—experts estimate the total digital asset transaction volume hit $4.1 billion in 2023, with a mind-blowing 91.5% happening outside the regulated space.

Tuleushin is dropping truth bombs: "If we lift all restrictions and let digital asset trading loose across Kazakhstan, it's going to be huge. Flexible rules will draw in the big guns, just like in the UAE. We could become Central Asia's crypto capital, going head-to-head with Uzbekistan and Kyrgyzstan, who are already in the game. Legalizing the gray zone would funnel billions of tenge into our budget. Just a 10% tax could pull in over 190 billion tenge a year ($372.9 million), enough to build dozens of new schools and hospitals from the ground up!"

To make this happen, Tuleushin's pushing for flexible crypto trading rules beyond the AIFC. The Ministry of Digital Development is cooking up plans for transparent crypto exchanges and ATMs. But they'll need to team up with the National Bank and the Financial Market Regulation Agency to get this rolling.

And don't forget about the digital tenge! Kazakhstan is gearing up to expand its use, designed to keep public spending in check. The CBDC pilot has already unleashed 250 billion digital tenge, using unique digital tags to track every penny spent.