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Kazakh Lawmaker Proposes Stricter Controls on Cryptocurrency Market

Olzhas Kuspekov, a member of Kazakhstan’s Mazhilis (the lower house of parliament), has proposed tightening government regulation of cryptocurrency circulation and blocking access to unlicensed crypto exchange websites and mobile applications. Currently, cryptocurrency transactions in Kazakhstan are only permitted through licensed platforms operating under the Astana International Financial Center (AIFC). However, Kuspekov stated that in practice, these exchanges accounted for less than 14% of the country's total crypto transactions in 2023. Citing data from U.S.-based blockchain analytics firm Chainalysis, he said the illegal segment of Kazakhstan’s crypto market reached $3.5 billion last year out of a total market volume of $4.1 billion. In a parliamentary inquiry addressed to the chairman of the National Bank of Kazakhstan, Kuspekov expressed concern that unlicensed exchanges continue to operate openly. “Their applications remain available on the AppStore and PlayMarket, and they are widely advertised on social media,” he said. He called on the National Bank to initiate blocking of these digital platforms. Kuspekov also urged the government to audit money transfers and enhance internal controls among commercial banks to ensure compliance with cryptocurrency legislation. “Some banks are servicing crypto transactions that fall outside the legal framework. According to the Financial Monitoring Agency, more than KZT 4.2 billion ($8.2 million) in transactions were processed through accounts at ten financial institutions. In most cases, internal compliance mechanisms were not applied,” he stated. The lawmaker further warned of a growing trend among young Kazakhs becoming involved in the gray market, influenced by bloggers and self-styled financial “coaches.” As a countermeasure, he proposed the establishment of a state digital reserve, under the National Bank, for storing seized crypto assets. As previously reported by The Times of Central Asia, other deputies from the Ak Zhol faction have also called for the creation of a national cryptocurrency bank to further formalize and regulate the digital asset economy in Kazakhstan.

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Binance Founder to Advise Kyrgyzstan President on Digital Assets

On May 3 in Cholpon-Ata, President Sadyr Japarov met with Changpeng Zhao, founder of Binance, the world’s largest cryptocurrency exchange, to discuss the future of digital assets and blockchain technologies in Kyrgyzstan. The meeting focused on the development of the country’s digital asset ecosystem, the introduction of blockchain technology into public administration, and measures to bolster cybersecurity. Japarov emphasized that Kyrgyzstan is actively promoting digital assets, particularly through the planned introduction of a national digital currency, the digital som. Changpeng Zhao expressed his readiness to support Kyrgyzstan’s digital transition by consulting and training local specialists involved in developing and implementing the digital som. During the meeting, Japarov presented Zhao with a certificate appointing him as a public adviser to the President of Kyrgyzstan on the development of digital assets. The following day, May 4, Japarov chaired the inaugural session of the National Council for the Development of Virtual Assets and Blockchain Technologies in Cholpon-Ata. Zhao was officially accepted as a member of the Council, which was established to formulate a unified state policy on virtual assets and promote their use in governance and key economic sectors. Japarov outlined the Council's main areas of focus: Enhancing financial literacy and supporting educational programs Strengthening cybersecurity and protecting users from digital fraud Integrating blockchain technologies into public administration systems “Interest in cryptocurrency is growing every year in Kyrgyzstan, and blockchain technologies and digital assets are becoming the basis of a new financial system,” Japarov stated. Earlier, the National Investment Agency of Kyrgyzstan signed a Memorandum of Cooperation with Zhao. Under the agreement, Binance will assist in developing blockchain infrastructure, creating a national cryptocurrency reserve, and training professionals in blockchain technology, virtual asset management, and cybersecurity.

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Binance to Assist Kyrgyzstan in Developing Blockchain Infrastructure and Crypto Assets

Kyrgyzstan’s National Investment Agency has signed a Memorandum of Cooperation with Changpeng Zhao, founder of Binance, the world’s largest cryptocurrency exchange by trading volume. According to the agency, Binance will assist Kyrgyzstan in several key areas, including the development of blockchain infrastructure and the creation of a national cryptocurrency reserve. The partnership will also focus on training young professionals, government employees, and specialists in blockchain technologies, virtual asset management, and cybersecurity. In addition, Binance will provide support in establishing a management system for virtual assets and blockchain technology in Kyrgyzstan source. While public interest in cryptocurrencies continues to grow in Kyrgyzstan, the market remains poorly regulated. Earlier this year, the Ministry of Economy and Commerce proposed legislation to create licensed crypto banks that would offer regulated banking services related to digital assets. The ministry stressed the need to integrate crypto assets into the national financial system, citing the rapid advancement of digital technology and the economic potential of legalizing cryptocurrency transactions. The introduction of crypto banks is expected to increase transaction volumes, boost tax revenues, and create new jobs in the fintech sector, positioning Kyrgyzstan as a regional hub for financial innovation. In a separate move to stabilize the sector, Kyrgyzstan’s Cabinet of Ministers significantly raised the minimum authorized capital required for crypto exchanges, from 100 million KGS to 10 billion KGS, a hundredfold increase. The Ministry of Economy and Commerce, which initiated the reform, stated that the measure is designed to ensure the financial stability of crypto platforms, safeguard user interests, and foster a transparent and secure virtual assets market. Existing exchanges have until January 1, 2026, to comply with the new capital requirements.

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Kazakh Lawmakers Propose Creation of National Cryptobank

Azat Peruashev, leader of the Ak Zhol political party's faction in the Mazhilis, the lower house of Kazakhstan’s parliament, has proposed the establishment of a national cryptobank. The initiative would involve the National Bank of Kazakhstan and second-tier commercial banks. In a formal inquiry addressed to Prime Minister Olzhas Bektenov, Peruashev highlighted the growing interest among Kazakhstanis in digital currencies, which are increasingly viewed as tools for investment, capital preservation, and peer-to-peer transactions. However, Kazakhstan currently lacks a legal framework for the use of digital assets, and the circulation of cryptocurrencies remains officially prohibited. Peruashev warned that this prohibition has driven the crypto market underground, with up to 90 percent of cryptocurrency transactions taking place outside the legal economy. "The ban has only fostered a shadow market, illegal exchanges, grey schemes, tax evasion, and the financing of illicit activities," he said. "Citizens are losing vast sums to scammers, pyramid schemes, and unregulated platforms. Billions in crypto assets are being transferred abroad without oversight, and the state is losing out on substantial tax revenues." Peruashev believes that establishing a cryptobank, a state-recognized institution for the regulation, exchange, and storage of digital assets, could serve as a vital tool for bringing the crypto sector into the legal domain. He proposed involving the National Bank and select commercial banks that already employ digital financial instruments. Such a system, he argued, would allow the state to reclaim control over the majority of crypto-assets circulating within the country and better protect users from fraud. The MP pointed to international precedents. In the United States, Anchorage Digital Bank, Kraken Bank, and Custodia Bank operate with federal oversight. Switzerland is home to SEBA Bank and Sygnum Bank both pioneers in integrating traditional finance with digital assets. “If something can’t be resisted, there’s only one solution, engage and lead. In this case, that means legalize and regulate,” Peruashev stated. As previously reported by The Times of Central Asia, Binance has officially launched operations in Uzbekistan, while Kyrgyzstan is considering legislation to establish licensed cryptobanks to manage digital assets within a regulated framework.