00:00Welcome to USPES Connect.
00:29We're highlighting business and economic opportunities in Kazakhstan and the wider Central Asia region, connecting with Europe and beyond.
00:37After becoming a crypto mining hotspot, Kazakhstan rolled out sweeping regulation in 2023.
00:43But by 2025, about 95% of digital asset turnover, over 13 billion euro, was still illegal.
00:50At the same time, trading volumes on licensed digital asset platforms surged more than 20-fold, from just over 270 million euro in 2023 to nearly 6 billion in the first three quarters of 2025.
01:03To discuss the attractiveness of Kazakhstan's crypto sector, we're now joined by Dauryan Karashev, chair of the National Blockchain Association.
01:11Mr. Karashev, welcome to the program.
01:14Thank you.
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.
01:28At the same time, crypto is not fully identifiable, is often used in criminal activity tool.
01:37That's why the main priority of our country is to provide transparency.
01:42When we talk about transparency, we should understand how and where the crypto traded, exchanged 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.
02:08And from 2026, the second framework under the National Bank will launch.
02:14And this creates the hybrid model.
02:18The 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.
02:35And it's driving the demand for such crypto.
02:38And it sells through licensed local exchanges 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.
03:02Moreover, this risk is not only about price volatility.
03:05There 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, the validators can leave the blockchain market.
03:25Mr. Karashev, thanks so much for being with us.
03:26Thank you for inviting me.
03:27By December 2025, the Financial Monitoring Agency had seized and frozen almost 14 million euro in illegally acquired crypto,
03:38some 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,
04:11and a national digital asset reserve, shifting 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.
04:56In the crypto-criminalization, today, we can use a system that allows us to understand transactions,
05:05to build cards, create an analytical data, which will also be used in requests for centralized crypto-birds,
05:16and use them for further explanation in the court.
05:21Through the Elitau CryptoCity concept,
05:23Kazakhstan hopes to attract scalable innovation and investment that will contribute to economic growth
05:28within a securely regulated environment.
05:30Joining 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.
05:44Thank you. Thank you for your invitation. It's a pleasure to be here.
05:46How will digital finance help drive Kazakhstan's economic modernization
05:52through the National Reserve and CryptoCity project?
05:54In December, we launched the National Crypto Reserve.
05:57It essentially would help us to diversify our sovereign portfolio.
06:01We will have three types of investment there.
06:03So the first type is confiscated funds from illegal activity in crypto, etc., etc.
06:09But we also will be directly investing in certain crypto assets, for example, Bitcoin or whatsoever.
06:16And the third type is a direct investment to crypto-related activities, ETF funds,
06:20crypto ecosystem players like Binance or Binance Equity and these companies.
06:25But we will make this investment, of course, on a risk-based approach.
06:30So we hope that this type of class will help us to drive our profits.
06:35How will the National Bank protect the Tengue now that crypto is entering the financial system?
06:40And in essence, we are trying to build this national crypto ecosystem anchored to national currency.
06:46So naturally, it wouldn't really harm our monetary sovereignty or financial stability.
06:51But of course, it would take time.
06:52And we hope that the regulation that we developed is balanced.
06:56So on one hand, we want to protect consumers from illicit activity, from fraud.
07:00And we want to prevent capital outflows and many other bad things.
07:06But on the other hand, we want to enable innovative business models.
07:09And it just will be two jurisdictions within one country with two different regulators.
07:14And they would complement each other.
07:16I don't see any conflict of interest.
07:18We will focus on mostly on the local supply and demand, retail, crypto investments, etc.
07:25And like local players in AFC will regulate the players who want to be a little bit more global and regional.
07:33And we will build bridges between offshore jurisdiction, AFC, and onshore jurisdiction.
07:37So it's complementary things.
07:39We are not buying anything that is already happening in AFC.
07:43We're just expanding this to build a more sophisticated digital ecosystem in Kazakhstan.
07:48Mr. Jolinov, thanks so much for your time today.
07:50Yeah, thank you.
07:51It's been a pleasure.
07:54That's all for now.
07:55See you in the next episode of EastWest Connect.
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