President Kassym-Jomart Tokayev recently revealed that Kazakhstan intends to create a national digital asset fund. This fund aims to establish a strategic reserve of cryptocurrencies for the country.
The initiative, spearheaded by the National Bank of Kazakhstan’s investment arm, forms part of a larger strategy. Authorities are implementing directives designed to accelerate the growth and development of a robust digital asset ecosystem across the nation.
Previously, the Kazakh government expressed interest in using confiscated Bitcoin to create a reserve. National Bank Chairman Timur Suleimenov emphasized that centralizing control of these assets under a dedicated institution would enhance oversight and reduce potential risks.
Nurkhat Kushimov, General Manager of Binance Kazakhstan, mentioned in a prior interview with ForkLog that Kazakhstan possesses a “very strong base” for building a Bitcoin reserve, citing its advanced cryptocurrency regulatory framework.
Digital Tenge
Concurrently, efforts are underway to broaden the application of the digital tenge. This includes integrating it not only into National Fund projects, but also into the broader financial infrastructures at both national and regional levels, and within state-owned enterprises.
Suleimenov indicated in July that the platform supporting Kazakhstan’s Central Bank Digital Currency (CBDC) is scheduled for a full launch in December. According to him, 257.5 billion digital tenge are currently in circulation.
Pilot programs for the digital currency have been successful across more than ten sectors. One significant achievement is the reduced VAT refund processing time – the implementation of digital tenge shortened the period from 75 to just five business days.
The National Bank of Kazakhstan began its exploration of a potential CBDC back in 2020. Initial results from the digital tenge pilot program were reported by the regulator in December 2021.
Other Directives from Tokayev
President Tokayev has instructed the cabinet and the National Bank to formulate an investment plan. This plan aims to allocate up to $1 billion towards high-tech industries within the country. Furthermore, efforts will be made to encourage greater participation from second-tier banks in financing the real economy, as their liquidity is currently invested primarily in low-risk assets.
A pivotal measure involves passing a banking law before the year’s end. This legislation is intended to promote the liberalization of digital asset circulation and boost the fintech sector.
The President stressed the potential dangers of comprehensive digitalization, pointing out that rising incidents of online fraud pose a significant threat to financial stability.
“An intelligent system designed to combat cybercrime must be developed. Legislative adjustments and improvements to law enforcement agency practices should be implemented if necessary,” he stated.
Tokayev also announced the launch of the “Al-Sana” program. This initiative aims to involve as many as 100,000 students in high-tech projects. Educational materials covering the fundamentals of artificial intelligence will be developed for schoolchildren, and teachers will receive specialized training in using AI tools.
“Artificial intelligence competence should start at the school level,” the President of Kazakhstan emphasized.
Kazakhstan will also launch “Qazaq Digital Mektebi,” a digital learning platform. This platform will allow students, even those in remote villages, to explore opportunities related to AI through distance learning.
Kazakhstan’s Cryptocurrency Market
In May, Kazakh authorities revealed their interest in the significant potential tax revenues that could be generated from the cryptocurrency market.
The First Vice Minister of Kazakhstan commented that legalizing and regulating the mining and trading of digital assets throughout the country (extending beyond the AIFC) would help Kazakhstan become a leading regional crypto hub. It would also attract key industry players and substantially boost the country’s budget revenues.
Around the same period, the National Bank developed legislative amendments. These amendments legally define cryptocurrency exchange operators and introduce a licensing system for their operations.
In June, Kazakhstan introduced cryptocurrency payment cards. These cards are linked to wallets held on exchanges licensed within the AIFC. Recent figures indicate that over 4,000 companies from more than 80 countries are registered within the financial center, providing services like banking, insurance, investment, trading, and other financial activities.
On August 13, the Astana International Exchange (AIX) commenced trading of Central Asia’s first spot Bitcoin ETF, under the ticker BETF. Earlier in September, Kazakhstan authorized the use of stablecoins for payments of regulatory fees.
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