Kazakhstan allocates $350M from sovereign wealth fund to crypto reserve

Kazakhstan has set aside $350 million from the National Fund of the Republic of Kazakhstan to support the formation of a national crypto reserve, Deputy Chairperson of the National Bank of Kazakhstan Aliya Moldabekova said at the Annual Business Review this week.

Established to manage the country’s resource wealth, the National Fund of the Republic of Kazakhstan accumulates revenues from oil, gas, and mineral extraction and serves as a fiscal buffer to support economic stability during periods of stress.

The National Investment Corporation (NIC), a subsidiary of the National Bank of Kazakhstan, will be responsible for establishing the country’s national crypto reserve. According to local media reports, $350 million from the National Fund has been transferred to a dedicated account at the Central Depository.

The state will not buy crypto directly. Instead, the reserve will initially be built through investments in crypto-focused hedge funds, with five funds currently under review.

At a later stage, the central bank is considering equity investments in venture capital funds linked to digital assets.

The reserve will also be funded with crypto seized by law enforcement agencies, a practice presently adopted by the US.

Kazakhstan has positioned itself as a regional crypto hub since 2022, when it attracted Bitcoin miners relocating from China. The country has since legalized crypto mining and trading through the Astana International Financial Centre.

Earlier this year, President Kassym-Jomart Tokayev signed legislation to modernize Kazakhstan’s banking system and integrate digital finance into the national financial framework.

The announcement follows a crackdown on illegal crypto exchanges in Kazakhstan, with authorities shutting down 130 unlicensed platforms that processed $124 million in transactions late last year.