Kazakhstan Proposes '70/30' Model to Fund Energy Modernization Through Cryptocurrency Mining
Kazakhstan is actively developing initiatives to upgrade its energy system through digital mining and expanding cryptocurrency trading outside the economic zone of the Astana International Financial Centre.
In an article published in Kazakhstanskaya Pravda, Kanysh Tuleushin, First Vice Minister of Digital Development, Innovation and Aerospace Industry, presented the government’s strategy for implementing digital mining to modernize the country’s energy infrastructure and improve its efficiency. Under the proposed “70/30” model, foreign investors would invest in upgrading thermal power plants, with 70% of the newly produced energy going into the national grid and 30% going to mining.
Tuleushin noted that this model is similar to the practice in the United States, where crypto miners help balance the energy grid by consuming excess electricity during periods of low demand. He believes that Kazakhstan could take a similar approach, viewing mining farms as a means of stabilizing and supporting the energy system.
He also suggested using associated petroleum gas, a byproduct of oil production that is often flared or emitted, to generate electricity for mining farms. This would help reduce the negative impact on the environment and create new sources of income for oil companies.
According to Tuleushin, digital mining has generated $34.6 million in tax revenue over the past three years. Since the beginning of 2023, Kazakhstan has registered over 415,000 units of mining equipment, issued 84 licenses, and accredited five mining pools, and the sector continues to grow.
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In addition to mining initiatives, Kazakhstan is also considering a nationwide expansion of cryptocurrency trading regulations, which are currently limited to the AIFC, a special economic zone with an independent legal system.
The volume of cryptocurrency trading on the AIFC exchanges increased from $324.2 million in 2023 to $1.4 billion in 2024. However, according to experts, the total volume of transactions with digital assets in Kazakhstan in 2023 will reach $4.1 billion, with 91.5% of them being carried out outside regulation.
“…if all restrictions were lifted and digital asset trading was allowed throughout Kazakhstan, the impact could be significant. Flexible rules would attract major players, as we have seen in the UAE. Kazakhstan could become the cryptocurrency hub of Central Asia, competing with Uzbekistan and Kyrgyzstan, which are also actively developing this market. Legalization of the gray zone would bring billions of tenge to the budget. For example, just a 10% tax could generate more than 190 billion tenge per year (US$372.9 million), which is enough to build dozens of new schools and hospitals from scratch,” the minister noted.
To this end, Tuleushin proposed establishing flexible rules for cryptocurrency trading outside the AIFC. He said that the Ministry of Digital Development is currently developing proposals for the creation of transparent crypto exchanges and ATMs. However, their implementation will require approval from the National Bank and the Financial Market Regulation Agency.
In addition, Kazakhstan is currently preparing to expand the use of the digital tenge, which was created to ensure full traceability of government spending. The CBDC pilot project has issued 250 billion digital tenge to date, using unique digital tags to track spending.
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Source: cryptonews.net
