Kazakhstan plans to establish national crypto reserve

The National Bank of Kazakhstan plans to establish a state-managed cryptocurrency reserve, according to a Monday report by state news agency Kazinform.

Local authorities are studying the development of a local crypto reserve, which would follow international practices. Typically, such reserves are likely to be funded with expropriated digital assets and state-run crypto mining operations, the report said.

National Bank of Kazakhstan Chairman Timur Suleimenov acknowledged the volatility and risks associated with crypto assets. He said that placing the reserve under the control of a centralized institution would ensure its proper oversight and risk management.

A response from the national bank to a parliamentary inquiry concerning digital assets, dated May 22, also stated that the central bank supports the creation of a state-run crypto reserve. The document suggests that it could be managed by a national bank subsidiary specializing in alternative investments.

Kazakhstan's central bank's response to the inquiry. Source: Mazhilis of the Parliament of the Republic of KazakhstanRelated: El Salvador buys another 12 Bitcoin for country’s reserve despite IMF deal

Kazakhstan bets on crypto

This is just the latest in a series of reports concerning Kazakhstan’s adoption of cryptocurrencies. In May, President Kassym-Jomart Tokayev announced plans to launch “CryptoCity,” a pilot zone where cryptocurrencies can be used to pay for goods and services.

Kanysh Tuleushin, Kazakhstan’s first vice minister of digital development, said in May that with easier regulation, the country could become a leading crypto hub in Central Asia.

At the same time, authorities are pursuing stricter enforcement, as seen in the crackdown on 36 illegal cryptocurrency exchanges in 2024. Officials said the crackdown aimed to curb money laundering and bolster financial oversight.

Related: Crypto asset reserve bill lands in Ukraine’s parliament

National crypto reserves grow in popularity

State-run national cryptocurrency reserves are gaining increasing popularity worldwide, although such initiatives typically only consider Bitcoin (BTC) as a potential option. Last week, Pradeep Bhandari, spokesperson for India’s ruling BJP party, called for a Bitcoin reserve pilot and clarity on the country’s approach to crypto.

Earlier this month, Texas Governor Greg Abbott signed a bill officially authorizing the creation of the Texas Strategic Bitcoin Reserve. Both initiatives follow the US Strategic Bitcoin Reserve.

The US is also seeing increasing momentum behind the idea. US Senator Cynthia Lummis recently stated that certain divisions within the American military support the idea of a national Bitcoin reserve to mitigate economic warfare threats.

Magazine: US risks being ‘front run’ on Bitcoin reserve by other nations: Samson Mow

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