Bitcoin Spot Exchange-Traded Fund (ETF) in Kazakhstan given green light on Binance Smart Chain (BNB chain)
Kazakhstan Becomes a Leading Bitcoin Mining Hub
Kazakhstan's cryptocurrency mining landscape expanded significantly after China's 2021 crypto ban, as many mining operations relocated there due to lower energy costs and initially lax regulation. However, this rapid growth led to substantial illegal mining activities, causing severe strain on Kazakhstan's electricity grid and prompting the government to implement stricter controls and crackdowns on unauthorized miners.
Following China's comprehensive ban on crypto mining, Kazakhstan quickly became a major global mining hub [1][3][4]. Large-scale illegal mining operations diverted massive amounts of electricity (over 50 MWh in some cases), equivalent to the consumption of mid-sized cities. These illicit activities caused blackouts and grid instability, creating an urgent need for regulatory response [2][3][4].
Authorities imposed regulations requiring mining farms to purchase electricity only through a state-run marketplace with strict caps (e.g., 1 MWh per transaction). They have conducted high-profile raids and confiscations related to illegal mining, targeting corrupt utility insiders and seizing assets bought with illicit proceeds [2][3][4].
Kazakhstan issued 84 licenses and registered over 415,000 mining devices, aiming to bring the sector under formal oversight. The government promotes crypto adoption through infrastructure projects like a "CryptoCity," and mandates miners to sell a majority of mined assets via regulated exchanges like the Astana International Financial Centre (AIFC) [5].
The regulated and formalized mining sector contributes significantly to the economy, with revenues surging to over $1.4 billion in 2024 and generating millions in tax contributions over recent years [5].
In a recent development, the Traded Bitcoin Fund (BETF) will be listed on the Astana International Exchange. The BETF is directly linked to Bitcoin and managed by BitGo. The fund will be traded in US dollars and subject to regulation by the Astana International Financial Center [6].
Significant interest in the BETF is expected from foreign investments, and it will be accessible to individual and institutional investors. Early estimates suggest that the assets managed by the BETF could range between $50 and $100 million [6]. This launch of the BETF signals a shift towards an energy source that goes beyond just Bitcoin mining.
Despite the growth of the Bitcoin mining industry, Kazakhstan is cracking down on illegal Bitcoin mining operations, as shown by the recent shutdown of an operation valued at $16 million in Almaty [2]. Kazakhstan is aligning itself with international markets, particularly the United States, which already gave the green light for spot Bitcoin ETFs in 2023 [7].
In summary, Kazakhstan evolved from a welcoming host for displaced Chinese miners into a tightly regulated crypto mining hub striving to balance economic benefits with energy sustainability. The government actively combats illegal mining and pushes for formal frameworks, though the explicit role of the Bitcoin Fund (BETF) in this evolution remains unreported in the cited information [1][2][3][4][5].
References:
- Kazakhstan's Bitcoin Mining Boom
- Kazakhstan Cracks Down on Illegal Bitcoin Mining
- Kazakhstan's Electricity Woes from Bitcoin Mining
- Kazakhstan's Bitcoin Mining Struggles
- Kazakhstan's Bitcoin Mining Revenues
- BETF to be Listed on Astana International Exchange
- US Approves Spot Bitcoin ETFs
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