Kazakhstan is set to establish a Kazakhstan crypto reserve valued at up to $1 billion. This ambitious fund will include confiscated cryptocurrencies and shares of companies in the sector. The initiative, expected to be operational by early next year, seeks to position the Central Asian nation as a key player in the global digital financial landscape.
The fund, which will store between $500 million and $1 billion worth of various assets, will not be limited solely to cryptocurrencies. Timur Suleimenov, Chairman of the National Bank of Kazakhstan (NBK), explained to Bloomberg that part of these assets will come from cryptocurrencies seized by the government. Repatriated assets will also be included.
Suleimenov detailed that the fund’s investments will encompass crypto ETFs (exchange-traded funds) and shares of firms dealing with digital coins. However, the regulator will be “very careful about direct exposure to cryptocurrencies,” the governor remarked in an interview in London. Furthermore, cash needed to fill up the reserve will also come from funds earmarked for alternative investments. “I think by year end, or January next year we will have it up and running,” Suleimenov announced.
How Will This Ambitious Kazakhstan Crypto Reserve Be Funded?
The creation of this reserve responds to an order from President Kassym-Jomart Tokayev issued in early September. The Kazakh leader called for liberalizing the domestic crypto market. Also, for developing a full-fledged ecosystem. He urged the creation of “a state fund of digital assets which will accumulate a strategic crypto reserve from the most promising assets of the new digital financial system.”
The inclusion of confiscated funds makes sense. The interior ministry recently reported that it dealt with over 1,000 criminal cases involving cryptocurrencies in the past two years. Their number has been growing alongside Kazakhstan’s prominence on the global crypto map. The country became a mining hotspot a few years ago. Its government eventually decided it wanted to make it a major Eurasian crypto hub. This year alone, Kazakh authorities seized $10 million worth of cryptocurrency from a massive pyramid scheme. They froze $9.7 million in Tether held by a crypto laundering platform on the dark web. They confiscated nearly $17 million in coins from some 130 busted illegal exchanges.
Earlier this week, Berik Sholpankulov, Deputy Chairman of the NBK, unveiled that the bank may also convert money from the National Fund, which holds financial and other assets, as well as some of the country’s gold and forex reserves, into cryptocurrency. It’s worth noting that Kazakhstan already has a cryptocurrency reserve. At the end of September, the Ministry of Artificial Intelligence and Digital Development announced the launch of the Alem Crypto Fund. This is backed by the local branch of Binance, the world’s largest crypto exchange. The department said its main purpose will be to serve as a vehicle for state-level savings and long-term investments in digital assets.
