Kazakhstan is aiming to increase its crypto operations. According to the official announcement, Kazakhstan intends to increase the scope of lawful cryptocurrency operations, and President Kassym-Jomart Tokayev has called for immediate reforms to strengthen the nation’s digital asset infrastructure.
Kazakhstan’s president, Kassym-Jomart Tokayev, is advocating for a rapid expansion of the nation’s crypto infrastructure as the U.S. government becomes increasingly supportive of the technology.
Kazakhstan Looks to Upgrade Digital Asset Infrastructure
The nation must swiftly adapt to the new tech environment, Tokaev underlined during a government meeting. Many cryptocurrency users in Kazakhstan, he noted, are still functioning in what he referred to as the “gray zone.”
Tokaev claims that only around 5% of cryptocurrency investors use regulated platforms, such as those found at Astana’s International Financial Center (e.g. Galaxy Digital, SkyBridge Digital Finance, Swiftex, among others).
Also Read: Mastercard Expands Crypto Credential Solution To UAE And Kazakhstan
New Reforms Come as Kazakhstan Experiences Rise in Crypto Usage
Today’s news comes as Kazakhstan has been experiencing a rise in crypto usage in the past years.
Kazakhstan emerged as a key participant in Bitcoin mining in October 2021. Because of its inexpensive electricity and laxer rules, Kazakhstan attracted more miners when China outlawed cryptocurrency mining in 2021. However, later a lot of that mining was prohibited.
As of October 2021, Kazakhstan accounted for 27.3% of the world’s mining activity, ranking second globally in terms of Bitcoin mining activity, after the United States.
However, the downside of the situation came in the form of electricity usage. A lot of electricity is used in this procedure.
The Kazakh government demanded stricter regulations on cryptocurrency mining in November 2021 as it started to strain the nation’s electrical infrastructure. In 2023, the market shrank to 4% as a result of the heightened regulatory supervision.
The use of unsecured digital assets, stablecoins, and security tokens was outlawed by Kazakhstan’s digital assets law in April 2023, with the exception of the AIFC framework.
Why is Kazakhstan’s Crypto Space Still Growing?
Despite strict supervision, Kazakhstan’s crypto sphere saw a rise mainly due to audience curiosity and the need for decentralized finance.
One of the main causes of Kazakhstan’s rise in the cryptocurrency market is the country’s sophisticated fintech industry, which offers sophisticated financial services and digital payment solutions.
A strong internet penetration rate of 92% as of 2024 is accompanied by high banking penetration (81 percent in 2021) and broad smartphone usage (83 percent in 2023). Furthermore, 89% of national payments are currently made without cash.