Kazakhstan plans CryptoCity as pilot project for crypto payments
The Central Asian republic of Kazakhstan is planning to establish a pilot project that will enable the use of crypto as a means of exchange for goods and services within a specific zone.
That’s according to a statement published on Akorda.kz, the official website of the President of Kazakhstan. The statement incorporates the text of a keynote speech delivered by President Kassym-Jomart Tokayev at the Astana International Forum. Tokayev stated:
“We are planning to create a pioneering pilot zone called CryptoCity where cryptocurrencies might be used for purchasing goods, services, and even beyond.”
Working towards digital transformation
The initiative forms part of Kazakhstan’s efforts to make progress in terms of digital transformation, as well as an aspiration to become an IT hub within the Eurasia region.
For the purposes of the pilot program, the use of cryptocurrencies for the payment of goods and services has been authorized by the government within a pre-defined sandbox environment. Alatau City, an urban development located north of the Kazakhstani city of Almaty, has been chosen for the pilot scheme.
Alatau has been established as a special economic zone and planned to become a hub for new technology and knowledge, alongside global tourism. It hosts the Innovation Technology Park together with the Kazakhstan National Nuclear Center, Institute of Nuclear Physics and the Physics & Technology Institute.
It’s envisaged that the existing technology and knowledge base within Alatau will support its expansion into the area of crypto payments and blockchain development.
In addition to crypto payments, other blockchain-based technologies related to taxation systems, investment and decentralized identity systems will be nurtured and encouraged within the Alatau special economic zone.
Potential Eurasian crypto hub
In a recent opinion piece published by the Russian-language government-backed newspaper Kazakhstanskaya Pravda, Kanysh Tuleushin, Kazakhstan’s vice minister of digital development, suggested that the Central Asian republic has the potential to position itself as the region’s leading crypto hub.
Tuleushin also suggested that crypto mining operators could help to modernize the country’s energy sector, playing a role in stabilizing the country’s power grid, while making use of surplus electricity. Kazakhstan had proven to be a popular destination for Bitcoin miners in the past. However, the sudden influx of miners following a ban on the activity in China in 2021 was unplanned for.
The surge in electricity demand put the country’s electricity grid under pressure, leading to blackouts in some cases. In 2023 President Tokayev signed legislation into law that limited the energy use of domestic crypto miners. Despite that negative experience, it appears that Tuleushin has seen the benefits that the activity can bring when regulated and planned for.
Back in March, it emerged that lawmakers in Kazakhstan had proposed the creation of a crypto bank. One obstacle to the creation of the bank is a lack of a crypto regulatory framework. According to a report published earlier this month, the National Bank of Kazakhstan is now in the process of preparing a regulatory framework for digital assets.
