Kazakhstan's government plans to support its national cryptocurrency reserve by retaining part of the digital assets produced under newly approved rules for "strategic digital mining."

The framework gives participating mining companies preferential access to electricity in exchange for transferring as much as 10% of the coins minted at their data processing facilities to the state.

Kazakhstan to use domestically mined cryptocurrency for reserve

Authorities in Astana have outlined a mechanism for adding to Kazakhstan's crypto reserve by directing a share of digital currency mined in the Central Asian country into state-controlled holdings.

The government has adopted new rules for "strategic mining," a program that provides selected enterprises with a guaranteed supply of electricity, a critical resource for large-scale crypto mining operations.

In return, participating mining companies must transfer up to 10% of the coins produced at their Bitcoin farms to the state after deducting the cost of the electricity used in the mining process.

The regulations are included in a recently published government decree and are scheduled to take full effect on August 1, 2026, Russian crypto news outlet Bits.media reported Thursday.

The decree establishes 10-year electricity quotas, initially supplied by the state-run Ekibastuz-1 coal-fired thermal power plant in the Pavlodar region of northeastern Kazakhstan. The choice of a coal-fired facility reflects Kazakhstan's reliance on fossil fuels for the majority of its power generation, a factor that has periodically drawn scrutiny over the carbon footprint of industrial-scale crypto mining in the country.

Under the program, miners will be able to buy a combined 300 megawatts (MW) of electricity at capped rates directly from one of Kazakhstan's largest power producers, bypassing distributors.

Companies taking part in the program will be required to maintain a separate wallet for storing and transferring cryptocurrency mined under the initiative. They will not, however, be barred from conducting mining operations outside the program.

Strategic mining applicants face detailed eligibility rules

Mining companies seeking access to the incentives offered through the "strategic digital mining" initiative must file a formal application.

The application must include documents proving compliance with a broad set of requirements, according to a report by the Zakon.kz information portal.

Eligible companies must own a data processing center designed for cryptocurrency mining with a minimum capacity of 150 MW and must control computing power of at least 150 TH/s per rig. The threshold effectively limits participation to large industrial operators, consistent with Astana's broader push to consolidate the sector around regulated, high-capacity players rather than smaller or informal miners.

Applicants must also have no outstanding debts on mandatory payments to the state budget, including taxes, fees, pension contributions and social security payments. Their property must not be subject to encumbrances.

The rules also require mining operators to secure reliable internet access, including through separate contracts with at least two telecommunications operators for data transmission services.

In addition, operators must maintain a service center at their mining facilities for repairing mining hardware and software.

Personnel employed to operate the crypto farms must be qualified for such work and hold the relevant diplomas and certificates from educational institutions, manufacturers and training courses.

Approved companies will be able to sign electricity supply agreements with the Ekibastuz-1 power plant. Other energy producers may also participate in the program in the future.

Kazakhstan continues wider crypto industry strategy

Kazakhstan became a major destination for Bitcoin miners after China moved to enforce a ban on the activity several years ago. By late 2021, the country ranked among the world's largest Bitcoin mining hubs by hashrate, according to data from the Cambridge Centre for Alternative Finance, trailing only the United States.

The large influx of miners contributed to electricity shortages in the country. Astana responded by imposing higher electricity rates on miners and taking action against illegal mining operations.

Since then, the Kazakh government has introduced a series of measures to regulate the sector as part of a broader strategy to position the country as a Eurasian crypto hub.

The former Soviet republic recently issued its first license for crypto exchange services under its updated law "On Digital Assets," as previously reported by Cryptopolitan.

The revised legislation, originally adopted and enforced in 2023, gives miners additional legal options to exchange cryptocurrency they mint into fiat currency within Kazakhstan.

At the same time, Kazakhstan has been developing a cryptocurrency reserve controlled by its central bank. The plan to create the reserve was first announced at the beginning of this year.

The country intends to invest a significant portion of its funds, including gold and foreign exchange reserves, in financial instruments that provide indirect exposure to crypto. Its holdings are also expected to include seized and mined digital currency.

Kazakhstan's approach mirrors moves by other governments exploring state involvement in crypto mining or reserves. Bhutan's royal government has mined cryptocurrency using the country's hydroelectric resources, while El Salvador has used geothermal energy for state-backed Bitcoin mining and holds Bitcoin in its national treasury.