Kazakhstan's President Announces Establishment of National Cryptocurrency Fund and Adoption of Digital Payments for Smart Cities
In a bold move towards digital innovation, Kazakhstan has taken the lead in Central Asia, launching the region's first spot Bitcoin Exchange-Traded Fund (ETF) in August 2024. This marks the beginning of a comprehensive approach to digital finance that positions the country as a model for other emerging markets.
The Digital Tenge, Kazakhstan's central bank digital currency (CBDC), is already showing promising results. Not only is it being used for transactions, but it has also been instrumental in funding significant projects, such as the Dostyk-Moynty Railway. However, the $467.8 million figure attributed to Digital Tenge transactions does not specifically refer to transactions made using the CBDC.
One of the most exciting developments is the creation of CryptoCity, a planned smart city in Alatau. This city of about 52,000 people will serve as a research hub, housing major scientific institutions, and offering unique advantages due to its status as a regulated sandbox. In this controlled environment, authorities can test cryptocurrency use in real-world conditions while maintaining oversight.
Residents and businesses in CryptoCity will be able to use cryptocurrency for daily purchases like groceries, services, and even property. The Digital Tenge works with major payment networks like Visa and Mastercard, and users can store the Digital Tenge in plastic cards and use it through digital wallets like Apple Pay and Samsung Pay.
Kazakhstan's strategy for digital finance includes government crypto reserves, practical CBDC implementation, and real-world testing through smart city development. In September 2025, Kazakhstan became the first Central Asian country to allow regulated firms to pay government fees using stablecoins like USDT and USDC. This move was followed by granting licenses to institutions for regulatory-compliant payments to the government using stablecoins such as USDT and USDC, although specific institution names are not publicly detailed.
However, Kazakhstan's approach to digital finance balances innovation with regulation. The country prohibits cryptocurrency use for regular payments nationwide, but creates controlled environments like the Astana International Financial Centre (AIFC) and CryptoCity for testing and development. This careful balance is evident in the shutdown of 36 unlicensed crypto exchanges in 2024 and the requirement for miners to sell 75% of their digital assets through licensed platforms.
The trading volume through AIFC-licensed exchanges increased significantly, from $324 million in 2023 to $1.4 billion in 2024. Kazakhstan's central bank is also establishing a State Fund of Digital Assets through its National Bank's Investment Corporation. This fund will collect 'promising assets' in the new digital financial system.
Kazakhstan's digital finance initiatives are not limited to cryptocurrencies. The country's president confirmed plans for CryptoCity, and several countries, including Brazil and Indonesia, are exploring strategic digital asset reserves following the United States' plans for a crypto reserve under President Trump.
The National Fund of Kazakhstan, which holds about $60 billion, mostly from oil revenues, and another state fund called Samruk-Kazyna, which manages $74 billion in state enterprises, are also part of Kazakhstan's digital finance strategy. The system has also reduced wait times for value-added tax refunds.
By the end of 2025, Kazakhstan expects to fully implement the Digital Tenge, including offline payment capabilities and cross-border transaction features. This comprehensive approach to digital finance, which includes a balanced regulation, government crypto reserves, practical CBDC implementation, and real-world testing through smart city development, positions Kazakhstan as a leader in digital finance innovation.
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