Kazakhstan’s Crypto Reserve Plans Move Further Along As Seized Assets Move To The Central Bank
- The National Investment Corporation (NIC) is planning to use seized digital assets to seed the new state reserve.
- Kazakhstan has already set aside $350 million in gold and foreign currency to support this change.
- The country is building a specialised “CryptoCity” in Alatau to test everyday crypto payments.
Instead of letting seized crypto sit idle after police raids, the Kazakhstani government plans to convert it into a productive state fund.
It intends to combine these seized coins with traditional reserves like gold and foreign currency to secure its economy.
How the NIC Manages the National Crypto Reserve
The National Investment Corporation (or NIC) is the investment arm of the National Bank of Kazakhstan and it has been tasked with managing the national crypto reserve.
Timur Suleimenov, the chairman of the National Bank shared that the fund will not buy coins directly on the open market. Instead, it will use a safer, more institutional approach.
The NIC has already opened a dedicated account at the Central Depository to handle these assets, and to avoid the extreme price swings that tend to happen in the crypto market, the corporation plans to route its investments through hedge funds.
They have already shortlisted five special funds to manage these trades, and this method allows the government to gain exposure to crypto without the risks of direct custody.
Seized Assets Provide a $5 Million Jumpstart
The plan to build a national crypto reserve is about using what the country already has.
President Kassym-Jomart Tokayev recently revealed that police have already seized over $5 million in digital assets from underground operations. Law enforcement seized these funds during crackdowns on illegal exchanges moving money out of the country.
So far, Law enforcement agencies have shut down roughly 130 unlicensed platforms that generated millions in revenue in the last five years. And by moving these confiscated coins into the national crypto reserve, Kazakhstan is turning the proceeds of crime into a benefit for its citizens.
This strategy is similar to that of the United States, where the government frequently auctions or holds Bitcoin seized from criminal cases. This “repurposing” of assets helps the state build a crypto portfolio without spending taxpayer money.
Protecting the Economy From Power Shortages
The decision to formalise the national crypto reserve also comes after a period of struggle.
Back in 2022, Kazakhstan also faced severe power outages caused by a rise in unregulated mining. This led to civil unrest and a major crackdown on the mining industry. Today, however, the government is now taking a more organised approach to this.
According to recent reports, state-backed mining operations will now contribute a portion of their earned coins directly to the national crypto reserve.
This makes sure that the energy used by miners directly benefits the state. The National Bank is also working on a stablecoin project on the Solana blockchain, called the digital Tenge.
Kazakhstan’s Strategy for the Crypto Reserve
The national crypto reserve is part of Kazakhstan’s larger push toward digitisation. The Astana Financial Services Authority (AFSA) has already started accepting stablecoins for regulatory fees.
Major platforms like Bybit and Binance have been brought in as consultants, and this creates an environment where local and international investors can trade without fear of fraud.
Over the rest of the year, the government hopes to have a complete framework for digital assets in place. This law is expected to regulate crypto platforms and set rules for how the national crypto reserve can be spent.
The post Kazakhstan’s Crypto Reserve Plans Move Further Along As Seized Assets Move To The Central Bank appeared first on Live Bitcoin News.
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