Kazakhstan Proposes National 'Crypto Bank' to Regulate Digital Asset Trading as 90% of Crypto Trading Occurs Unregulated

Kazakhstan Looks to Crypto Bank to Regulate Digital Asset Trading

Kazakhstan, long a haven for cryptocurrency miners due to its low energy costs, is now grappling with a surge in unregulated digital asset trading.

The country's current regulatory framework only allows digital asset activities within the Astana International Financial Center (AIFC), a special economic zone.

However, as a growing number of investors turn to unlicensed platforms outside the AIFC, legislators are calling for a more robust solution to govern this booming sector.

Peruaşev Proposes National 'Crypto Bank'

Azat Peruaşev, leader of the minority Aq Jol party in Kazakhstan’s lower house of Parliament, has raised a proposal to establish a national "crypto bank" to regulate and control digital asset trading.

According to Peruaşev, an overwhelming 90% of cryptocurrency activities in Kazakhstan take place outside of legal frameworks, exposing investors to the risks of scams and other illegal activities.

He expressed concerns that such a lack of regulation is creating a fertile ground for money laundering and tax evasion.

In a formal inquiry to Prime Minister Olzhas Bektenov, Peruaşev suggested that the country’s central bank should lead this initiative, with the involvement of commercial banks.

He noted that a well-regulated “crypto bank” could serve multiple roles, from controlling and exchanging digital assets to storing them securely within a legal framework.

Peruaşev explained,

"An effective tool for regulating the industry could be the creation of a cryptobank – an institution that will take on the functions of control, exchange and storage of digital assets in a legal field."

Global Examples of Digital Asset Regulation

Peruaşev’s vision draws inspiration from the United States and Switzerland, where private crypto-focused banks have been operating under regulatory supervision.

He pointed to Anchorage Bank and Custodia Bank in the US, alongside Sygnum Bank and SEBA Bank in Switzerland, all of which have successfully navigated the complexities of digital asset regulation.

He believes Kazakhstan could replicate this model, but with the government taking the lead, in contrast to the private initiatives seen in other countries.

While some crypto banks globally are private entities, Peruaşev advocates for a government-led model.

This mirrors Russia’s attempt to create a national digital asset exchange, although that project has yet to materialise.

His proposal, if accepted, would mark a significant shift in Kazakhstan’s approach to cryptocurrency oversight.

Support from Fellow Lawmakers

Peruaşev’s proposal has found support among other members of Parliament.

Ekaterina Smyshlyaeva, another lawmaker, expressed her backing for the initiative, stating that the establishment of a national “crypto bank” would provide legal clarity for investors.

She also emphasised the need for regulators to deepen their understanding of the evolving cryptocurrency landscape.

Smyshlyaeva stated,

"We need to better understand the nature and dynamics of the industry."

Smyshlyaeva also advocates for the decriminalisation of crypto trading on licensed platforms, suggesting that the government should focus on tighter control over licensed exchanges rather than outright bans.

A Growing Crisis in the Crypto Mining Sector

While Kazakhstan has attracted global crypto operators due to its affordable energy, the country’s crypto mining sector has recently faced significant challenges.

Power shortages have affected operations, forcing miners to scale back or relocate.

Despite these challenges, the country remains an attractive destination for crypto mining due to its relatively low energy costs compared to other regions.

Nevertheless, Kazakhstan’s growing digital asset sector faces a need for clearer regulations to protect both investors and the broader economy.

With billions of tenge currently flowing out of the country through unregulated exchanges, the creation of a national crypto bank could potentially address both the regulatory gap and the economic risks posed by unmonitored digital asset activities.

Peruaşev’s push for change comes in the wake of President Kassym-Jomart Tokayev’s call in January 2025 for an urgent update to the country’s digital asset framework.

The call for action underscores Kazakhstan's desire to remain competitive in the global crypto economy while ensuring greater legal oversight and protection for investors.