Kazakhstan is exploring a significant move into the cryptocurrency arena, contemplating the establishment of its first-ever cryptocurrency reserve. This, amid a record-breaking rally in Bitcoin (BTC) and an increasing adoption of digital assets by institutions, public companies, and nations.
Reports from local media indicate that the country’s gold and foreign exchange reserves, alongside the assets of the National Fund, are being considered for investment in crypto assets.
Kazakhstan Eyes Crypto Assets For National Fund
During a recent press conference, Timur Suleimenov, the head of the National Bank of Kazakhstan, outlined the country’s intentions. He mentioned that Kazakhstan is developing an alternative investment portfolio for its gold and foreign exchange reserves, as well as for the National Fund.
This portfolio reportedly aims to employ more aggressive strategies to enhance investment returns. Suleimenov noted that the country is looking at successful models from the Norwegian fund, American practices, and strategies used by Middle Eastern funds, many of which include investments in digital assets, either directly or through related exchange-traded funds (ETFs) and stocks.
Suleimenov emphasized that while the potential for high returns from such investments is appealing, the inherent volatility of digital assets necessitates a cautious approach.
He stated, “This is not an easy question, so you can’t rush here. Yes, such assets can bring high returns, but at the same time, they are characterized by high volatility.”
Evolving Digital Asset Regulations
In addition to the investment plans, the National Bank is also considering the creation of a state reserve for crypto assets. This reserve would be designated for storing digital assets that have been confiscated by law enforcement agencies.
To facilitate this, a separate infrastructure would be established, illustrating Kazakhstan’s commitment to not only participating in the digital asset economy but also managing it responsibly.
Furthermore, Suleimenov mentioned that if certain enterprises engage in mining cryptocurrencies on behalf of the state, a portion of those assets could be directed into the crypto reserve through taxes or mandatory payments.
The regulatory landscape in Kazakhstan is also evolving. Recently, there have been discussions about implementing administrative and criminal penalties for transactions involving crypto assets on the “gray market.”
Currently, digital asset trading is permitted only on licensed exchanges within the Astana International Financial Centre (AIFC). The National Bank is also planning to impose restrictions on advertising related to digital assets, aiming to create a more controlled environment for crypto transactions.
As of this writing, Bitcoin trades at $117,450. However, the market’s largest cryptocurrency saw its price reach a new record earlier on Monday of $123,000, registering an 11% surge in the monthly time frame.
Featured image from DALL-E, chart from TradingView.com