Kazakhstan's Central Bank Eyes Up to $300M Investment in Cryptocurrency

Kazakhstan's central bank is planning to invest as much as $300 million into cryptocurrency assets, although the final amount may vary between $50 million and $250 million based on market conditions. This careful approach follows a significant drop in the crypto market, particularly Bitcoin, which has seen a decline of 17% since early November.

Key Takeaways

The National Bank of Kazakhstan (NBK) plans to invest up to $300 million in crypto, depending on market conditions.
The investment will be sourced from foreign exchange reserves, not the sovereign wealth fund.
The central bank emphasizes a cautious approach due to recent market volatility.
Kazakhstan has a growing digital asset ecosystem and recently launched its first national crypto reserve fund.
There is an ongoing crackdown on illegal crypto operations within the country.

Cautious Crypto Investment Approach by Kazakhstan's Central Bank

Kazakhstan's National Bank is gearing up to invest up to $300 million in cryptocurrency assets. However, the final investment amount may fall between $50 million and $250 million, contingent on market conditions.

Timur Suleimenov, Chairman of the National Bank of Kazakhstan, revealed that the bank's investment will come from its foreign exchange reserves rather than the country’s sovereign wealth fund. He noted that due to recent market fluctuations, a cautious approach is essential before committing any funds.

Currently, Bitcoin has seen a downturn of 17% since early November, falling from $110,000 to $81,000, which has wiped approximately $500 billion off the total crypto market capitalization.

“Let the dust settle,” Suleimenov advised reporters, highlighting the challenges in achieving profitability during such a market downturn.

Crypto Investment Image

A Measured Stance on Digital Assets

The NBK has developed an investment portfolio that already includes high-tech stocks and financial instruments associated with digital assets as part of its gold and foreign exchange reserves.

Despite this framework, Suleimenov stated that regulators would not rush into any investment decisions unless favorable opportunities arise. “Until good investment opportunities emerge, we won’t rush these decisions,” he remarked during a briefing on November 28.

Earlier this month, Suleimenov had mentioned that Kazakhstan aims to establish a national crypto fund valued at up to $1 billion. He clarified that the bank would invest “cautiously” through exchange-traded funds and stocks of crypto companies rather than directly holding tokens.

This conservative approach stands in contrast to the grand vision expressed by President Kassym-Jomart Tokayev, who has advocated for the creation of a state-backed crypto reserve fund through the National Bank’s Investment Corporation. The president aims to build up strategic reserves of “promising assets” and has set aside up to $1 billion to support technological advancements in both high-tech and fintech sectors.

Kazakhstan's Expanding Crypto Ecosystem

The central bank's plans for investment align with Kazakhstan's rapidly evolving cryptocurrency landscape, which initiated its first national crypto reserve through the Alem Crypto Fund in September. This fund, set up by the Ministry of Artificial Intelligence and Digital Development and managed by Qazaqstan Venture Group, selected BNB as its initial asset through a partnership with Binance Kazakhstan.

Zhaslan Madiyev, Deputy Prime Minister, described the fund as a “reliable instrument for major investors and a foundational element for digital state reserves.” With a market capitalization over $120 billion, BNB functions as the native cryptocurrency of BNB Chain, facilitating transaction processing, fee payments, and governance participation.

In September, during the Astana Finance Days, Kazakhstan approved the use of stablecoin payments for regulatory fees, establishing a framework for participants to fulfill their obligations using U.S. dollar-pegged stablecoins through licensed Digital Asset Service Providers.

The country also launched Central Asia’s first Bitcoin ETF in August, with the physically-backed Fonte Bitcoin ETF trading on the Astana International Exchange and utilizing BitGo Trust for cold storage.

Crackdowns on Illegal Crypto Operations

While Kazakhstan advances its institutional crypto endeavors, it has intensified efforts to eliminate unlicensed operations, shutting down 130 illegal crypto exchanges in October and confiscating $16.7 million in digital assets suspected of being linked to criminal activities.

Authorities uncovered 81 underground cash-out groups that collectively transacted 24 billion KZT (approximately $43 million) in 2024.

Kazakhstan’s crypto environment has dramatically shifted from controlling 27% of global Bitcoin mining in 2021, following the relocation of operations from China, to just 4% by 2023, owing to grid pressures and regulatory changes.

As of September, the country has registered 415,000 mining machines and issued 84 licenses (64 of which are active) as part of its ongoing “70/30 project,” designed for foreign investors to fund upgrades to power stations.

During this period, President Tokayev also announced “CryptoCity” in Alatau as a pilot zone for everyday crypto payments, featuring a crypto banking system that provides exchange, storage, and transaction processing services while ensuring compliance with anti-money laundering regulations.

The digital tenge, which is the central bank's digital currency, is anticipated to be fully launched by the end of this year, serving as an additional payment method alongside cash and digital transactions, although its rollout remains uncertain.