00:00Welcome to US West Connect, we're
00:29highlighting business and economic opportunities in Kazakhstan and the wider Central Asia region,
00:35connecting with Europe and beyond. After becoming a crypto mining hotspot, Kazakhstan rolled out
00:41sweeping regulation in 2023. But by 2025, about 95% of digital asset turnover over 13 billion euro
00:49was still illegal. At the same time, trading volumes on licensed digital asset platforms
00:54surged more than 20-fold, from just over 270 million euro in 2023 to nearly 6 billion in the
01:01first three quarters of 2025. To discuss the attractiveness of Kazakhstan's crypto sector,
01:07we're now joined by Dauryan Karashev, Chair of the National Blockchain Association.
01:12Mr. Karashev, welcome to the program.
01:15What is Kazakhstan's ultimate goal when it comes to crypto? Is it control, revenue or innovation?
01:21The ultimate goal is clear and regulated development of crypto market in Kazakhstan.
01:27Crypto is innovation. At the same time, crypto is not fully identifiable, is often used in criminal
01:35activity tool. That's why the main priority of our country is to provide transparency.
01:41When we talk about transparency, we should understand how and where the crypto traded,
01:47exchange it, and who is responsible for that.
01:50How safe and attractive is Kazakhstan for international and domestic crypto investors?
01:55And does the state balance incentives with restrictions effectively?
02:00Until 2026, the sole and legal gateway for crypto was Astana International Financial Center.
02:07And from 2026, the second framework under the National Bank will launch.
02:14And this creates the hybrid model. The first system is for international investors.
02:21The second one is for internal investors.
02:25And Kazakhstan is also the leading crypto mining hub.
02:29The locally mined crypto is considered as clear without any history of transaction.
02:34And it's driving the demand for such crypto.
02:39And it sells through licensed local exchanges.
02:42It should enhance security and trust to our market for crypto investors.
02:48So what are the risks of trading in a currency that is not officially issued by the government?
02:54There is no central bank on behind that can provide transparency, stability and security.
03:01Moreover, this risk is not only about price volatility.
03:06There is also the infrastructural risk.
03:08For example, blockchain networks works with validators.
03:13Validators are paid by the same tokens.
03:16If the price for these tokens falls sharply and stays low,
03:22the validators can leave the blockchain market.
03:25Mr. Karashev, thanks so much for being with us.
03:27Thank you for inviting me.
03:28By December 2025, the Financial Monitoring Agency had seized and frozen almost 14 million euro
03:35in illegally acquired crypto, some linked to darknet operations and illicit marketplaces.
03:41In a bid to legalize and regulate the sector, President Tokayev announced the Alatau Crypto City project,
03:47the country's first pilot zone where crypto payments will be permitted.
03:51Kazakhstan plans to turn Alatau Crypto City into a pioneering digital hub and a smart city for innovation,
03:59attracting tech talent and investment.
04:02Users will be able to conduct crypto-based transactions for real estate and business activities.
04:07The sandbox will operate under crypto-friendly laws, tax incentives and a national digital asset reserve,
04:13shifting the economy from purely mining to a broader digital ecosystem.
04:16We have a special tax regime. It includes incentives for corporate income tax, VAT and others.
04:24And this will improve the return on investments.
04:28And the second is that we apply common law.
04:31Investors will definitely benefit because they will find familiar and predictable legal framework
04:37and eventually it will become a safe harbor for their assets.
04:40Alongside developing the crypto sector, the government is establishing a forensic system
04:44to detect a legal activity, ensuring a safer environment for users.
04:48Even if bad actors attempt to bypass regulations,
04:51Kazakhstan's crypto-forensic tools aim to restore users' rights and secure their interests.
04:56Through the Alatau Crypto City Concept, Kazasan hopes to attract scalable innovation and investment
05:02that will contribute to economic growth within a securely regulated environment.
05:08Through the Alatau Crypto City Concept, Kazasan hopes to attract scalable innovation and investment
05:21Malatau CryptoCity Concept Kazakhstan hopes to attract scalable innovation and investment
05:26that will contribute the economic growth within a securely regulated environment.
05:32Joining us now is Binur Zhalanov, Chief Digital Officer and Advisor to the Chairman of the National Bank of Kazakhstan.
05:41Mr Zhalanov, good to have you with us.
05:43Thank you. Thank you for your invitation. It's a pleasure to be here.
05:46How will digital finance help drive Kazakhstan's economic modernization through the National Reserve and CryptoCity project?
05:54In December, we launched National Crypto Reserve.
05:57It essentially would help us to diversify our sovereign portfolio.
06:00We will have three types of investment there.
06:03The first type is confiscated funds from illegal activity in crypto, etc.
06:08But we also will be directly investing in certain crypto assets, for example, Bitcoin or whatsoever.
06:15And the third type is a direct investment to crypto-related activities.
06:19ETF funds, crypto ecosystem players like Binance or Binance Equity and these companies.
06:24But we will make this investment, of course, on a risk-based approach.
06:29So we hope that this type of class will help us to drive our profits.
06:34How will the National Bank protect the Tenge now that crypto is entering the financial system?
06:39And in essence, we are trying to build this national crypto ecosystem anchored to national currency.
06:45So naturally, it wouldn't really harm our monetary sovereignty or financial stability.
06:50But of course, it would take time.
06:51And we hope that the regulation that we developed is balanced.
06:54So on one hand, we want to protect consumers from illicit activity, from fraud.
06:59And we want to prevent capital outflows and many other bad things.
07:05But on the other hand, we want to enable innovative business models.
07:08And this just will be two jurisdictions within one country with two different regulators.
07:13And they would complement each other.
07:15I don't see any conflict of interest.
07:17We will focus mostly on the local supply and demand, retail, crypto investments, etc.
07:24And local players in AFC will regulate the players who want to be a little bit more global and regional.
07:32And we will build bridges between offshore jurisdiction in AFC and onshore jurisdiction.
07:36So it's complementary things.
07:38We are not buying anything that is already happening in AFC.
07:42We're just expanding this to build a more sophisticated digital ecosystem in Kazakhstan.
07:47Mr. Jolinov, thanks so much for your time today.
07:49Yeah, thank you.
07:50It's been a pleasure.
07:51That's all for now.
07:54See you in the next episode of EastWest Connect.
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