Kazakhstan Proposes '70/30' Model to Fund Energy Modernization Through Cryptocurrency Mining
Kazakhstan is stepping up efforts to modernize its energy system through digital mining and expanding cryptocurrency trading outside the Astana International Financial Center economic zone.
In an article published in Kazakhstanskaya Pravda, Kanysh Tuleushin, First Vice Minister of Digital Development, Innovation and Aerospace Industry, outlined the government’s strategy for implementing digital mining to upgrade the country’s energy infrastructure and improve its efficiency. The proposed “70/30” model would see foreign investors finance the modernization of thermal power plants, with 70% of new energy output fed into the national grid and 30% used for mining.
Tuleushin noted that this model is borrowed from the practice of the United States, where crypto miners help balance the energy system by consuming excess electricity during periods of low demand. He believes that Kazakhstan can follow a similar path, presenting 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 discarded, to generate electricity for mining farms. This would help reduce the negative impact on the environment and create new sources of income for oil producers.
According to Tuleushin, digital mining has generated $34.6 million in tax revenue over the past three years. Since the beginning of 2023, more than 415,000 units of mining equipment have been registered in Kazakhstan, 84 licenses have been issued, and five mining pools have been accredited, and the sector continues to grow.
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In addition to its mining plans, Kazakhstan is also exploring the possibility of a national expansion of cryptocurrency trading regulations, which are currently limited to the AIFC, a specialized economic zone with an independent legal framework.
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 amount to $4.1 billion, with 91.5% of them occurring outside regulation.
“…if all restrictions were lifted and digital asset trading was allowed throughout Kazakhstan, the impact could be significant. Flexible rules would attract big players, as we have seen in the UAE. Kazakhstan could become the crypto hub of Central Asia, competing with Uzbekistan and Kyrgyzstan, which have also embraced 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 said.
To achieve this goal, 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 coordination with the National Bank and the Financial Market Regulation Agency.
Moreover, Kazakhstan is currently preparing to expand the use of the digital tenge, which was designed 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
