A senior government representative in Kazakhstan has announced that the nation has collected nearly $35 million in taxes from cryptocurrency mining companies in just three years. Officials believe that by promoting the mining and trading of digital assets, the Central Asian country will not only boost its budget revenue but also emerge as a regional crypto hub.
Growing Revenue from Crypto Mining in Kazakhstan
According to Kanysh Tuleushin, Deputy Minister of the Ministry of Digital Development, Innovation, and Aerospace Industry, digital currency mining has been steadily growing in Kazakhstan. Over the past three years, the sector has contributed 17.7 billion tenge (over $34.6 million) to the state budget.
In an article published by Kazakhstanskaya Pravda, Tuleushin revealed that since 2023, the government has issued 84 mining licenses and approved 5 mining pools. Authorities have also registered 415,000 mining devices.
The official attributes this growth to the increasing transaction volumes on cryptocurrency exchanges operating within the Astana International Financial Center (AIFC). Trading volumes surged from $324.2 million in 2023 to $1.4 billion in 2024.
Tuleushin pointed out that transaction volumes may continue to rise. Starting January 1, 2025, crypto miners will be required to sell at least 75% of their digital assets through trading platforms registered within the AIFC.
Crypto Miners Can Help Develop Kazakhstan’s Energy System
In his column, Tuleushin emphasized that Bitcoin mining facilities can contribute to the development of Kazakhstan’s energy system. They can utilize excess petroleum gas generated during oil extraction, reducing waste and supporting energy sustainability.
“Miners can help us upgrade our energy system. In the United States, they participate in balancing the grid by consuming excess energy during periods of low demand.”
Currently, foreign companies investing in the modernization of Kazakhstan’s thermal power plants are required to supply 70% of their generated electricity to the national grid. The remaining 30% can be used freely, including for powering crypto mining facilities.
Additionally, data processing centers can be established near oil fields. These centers can use associated petroleum gas (APG) to meet their energy needs, Tuleushin added.
APG, a byproduct of oil drilling, can be used for on-site electricity generation, supporting crypto mining operations. This approach not only reduces carbon emissions but also increases revenue for oil producers.
A few years ago, Kazakhstan attracted numerous miners with its relatively low electricity prices, especially after China intensified its crackdown on Bitcoin mining. However, Bitcoin mining has also been blamed for exacerbating the country’s energy shortages and frequent power outages.
According to business news outlet Kursiv, mining facilities consumed 901 million kWh of electricity last year, costing around $25.5 million, despite existing power shortages.
Miners operating in Kazakhstan are required to purchase electricity through centralized auctions organized by the country’s Electricity and Power Market Operator (KOREM). The company also sells energy imported from neighboring Russia.
Digital Minister Calls for Flexible Crypto Regulations
Kanysh Tuleushin emphasized that the Astana government is taking a cautious approach to the cryptocurrency market. The government classifies digital assets into two categories: secured assets (backed by other assets) and unsecured assets (such as Bitcoin and Ethereum).
Official regulations stipulate that trading can only take place under the special legal framework of the Astana International Financial Center (AIFC). However, it is estimated that the majority of cryptocurrency trading volume in Kazakhstan—over 91% of the $4.1 billion traded in 2023—occurs outside state regulation.
Tuleushin noted:
“If all restrictions were lifted and digital asset transactions were permitted within Kazakhstan, the impact could be significant. Flexible rules would attract major players, as we have seen in the UAE.”
Kazakhstan has the potential to become Central Asia’s cryptocurrency hub, alongside Uzbekistan, Russia, and Kyrgyzstan, which have already embraced the crypto market. The deputy minister firmly believes that legalizing cryptocurrency could inject billions of tenge into the national budget.
Tuleushin calculated, “For example, a 10% tax alone could generate over 190 billion tenge ( nearly $373 million) in annual revenue—enough to build dozens of new schools and hospitals.” He urged the adoption of favorable cryptocurrency regulations beyond the jurisdiction of the AIFC.
Frequently Asked Questions
How much tax revenue has Kazakhstan generated from crypto mining?
Kazakhstan has collected 17.7 billion tenge (over $34.6 million) in taxes from cryptocurrency mining activities over the past three years, according to government reports.
What are the new regulations for crypto miners in Kazakhstan?
Starting January 1, 2025, crypto miners will be required to sell at least 75% of their digital assets through trading platforms registered within the Astana International Financial Center (AIFC).
How does crypto mining support Kazakhstan’s energy system?
Mining facilities can help balance the grid by consuming excess energy, and they can use associated petroleum gas (APG) from oil drilling for electricity, reducing waste and carbon emissions.
What is the government’s stance on cryptocurrency trading?
The government permits trading only within the AIFC’s legal framework but is considering more flexible regulations to attract international players and increase tax revenue.
Why did Kazakhstan become attractive to Bitcoin miners?
After China’s crackdown on crypto mining, many miners moved to Kazakhstan due to its low electricity prices and favorable initial conditions.
How can miners purchase electricity in Kazakhstan?
Miners must buy electricity through centralized auctions organized by KOREM, the national electricity market operator, which also imports power from Russia.
For those interested in exploring crypto mining opportunities, staying informed about regulatory changes and energy policies is essential. As the market evolves, Kazakhstan aims to balance economic growth with sustainable energy use.