The global cryptocurrency mining landscape has undergone a dramatic shift since China intensified restrictions on Bitcoin mining operations in June 2021. As a result, Kazakhstan has rapidly ascended to become the world’s third-largest hub for Bitcoin mining. With abundant energy resources, a favorable climate, and progressive regulatory developments—particularly within the Astana International Financial Center (AIFC)—Kazakhstan is emerging as a top destination for international miners, especially those relocating from China.
This article explores the evolving legal framework around digital assets and mining in Kazakhstan, highlights key advantages for foreign investors, and outlines practical steps for establishing a compliant mining operation in one of Central Asia’s most promising fintech ecosystems.
Why Register in the Astana International Financial Center (AIFC)?
AIFC: A Global Hub for Digital Asset Innovation
The AIFC is a special economic zone established under the Constitution of the Republic of Kazakhstan. Designed to attract foreign investment, it operates under English common law and features an independent judiciary led by prominent international legal figures, including Lord Mance, former Justice of the UK Supreme Court.
Since its launch in 2017, the AIFC has evolved into a trusted jurisdiction for blockchain and digital asset companies. Major players such as Bitfury, Powerry, and Minebest have already registered their legal entities here, drawn by its transparent regulatory environment and strong rule of law.
👉 Discover how setting up in a globally recognized financial center can protect your mining business.
Strategic Climate and Energy Advantages
Kazakhstan's northern, northwestern, and central regions offer two critical advantages for large-scale mining: low-cost electricity and a cold, windy continental climate—ideal conditions for cooling energy-intensive data centers.
Mining operations require massive power consumption, making energy costs a decisive factor. In Kazakhstan, electricity prices are not only low but also stable year-round, unlike in China where seasonal fluctuations—especially during dry periods—affect supply and pricing.
Currently, around 3% of Kazakhstan’s total electricity generation comes from renewable sources, with over 116 renewable energy facilities producing 1,685 MW. The government aims to increase this share to 6% by 2025, 10% by 2030, and at least 50% by 2050, aligning with its commitments under the Paris Agreement on climate change.
Moreover, approximately 20% of energy is derived from natural gas, a cleaner alternative often sourced as a byproduct of oil extraction. This reduces environmental impact while supporting sustainable mining growth.
Legal Recognition of Digital Assets
In July 2020, Kazakhstan officially recognized Bitcoin as a digital asset—treated legally as property rather than currency or a financial instrument. While the use of cryptocurrencies as payment is prohibited domestically, holding and trading them as assets is permitted under specific conditions.
The AIFC’s FinTech regulations allow for the establishment of licensed cryptocurrency exchanges and other regulated digital asset activities. These rules provide clarity for businesses seeking compliance and long-term operational stability.
Regulatory Framework for Mining Operations
Kazakhstan has formalized its approach to digital mining through legislation that balances innovation with oversight:
- Mining is legal and recognized as an economic activity.
- There are no restrictions on hash rate operations.
- As of January 1, 2022, a nominal tax of 1 tenge (~$0.00232) per kWh is applied to mining activities—a move seen not as a barrier but as part of broader efforts to formalize the sector and generate state revenue.
To operate legally:
- Companies must obtain approval from the National Security Committee to import cryptographic equipment.
- They must notify the Ministry of Digital Development, Innovation, and Aerospace Industry about data center construction plans.
These requirements ensure transparency without stifling innovation.
Astana Hub: A Tech Park with Zero-Tax Benefits
To further incentivize investment, the AIFC launched Astana Hub, a technology park offering preferential treatment for digital businesses:
- 0% corporate income tax
- 0% VAT
- 0% payroll tax
- Only a 1% annual turnover-based royalty fee
This regime applies to companies operating within the AIFC’s tech ecosystem and managing IT infrastructure or hosting services—including cryptocurrency mining operations.
Such incentives make Astana Hub one of the most attractive jurisdictions in Eurasia for high-growth tech ventures.
👉 Learn how tax-efficient structures can boost your mining profitability.
Government Support and Future Outlook
Kazakhstan’s interest in blockchain technology dates back to 2017 when the AIFC partnered with EXANTE to develop local blockchain infrastructure. Since then, momentum has grown significantly.
Key milestones include:
- Introduction of legal definitions for “digital asset,” “cryptocurrency,” and “digital mining” in the Law on Informationization.
- Development of a national roadmap for blockchain and digital technologies in June 2020.
- Ongoing feasibility studies for a Central Bank Digital Currency (CBDC) called "digital tenge," supported by AIFC’s legal framework covering smart contracts, digital wallets, and token classification.
While unbacked cryptocurrencies like Bitcoin aren’t fully regulated for domestic circulation, they remain permissible as investment assets. The government appears focused on risk assessment rather than outright prohibition.
Banking Access for Crypto Businesses
One of the biggest challenges for crypto operators globally is banking access. In response, the AIFC has initiated a pilot program enabling registered crypto exchanges to partner with second-tier banks.
Under this framework:
- Investors must hold accounts with AIFC-registered banks.
- Banks act as intermediaries, allowing users to deposit fiat, buy crypto, trade on exchanges, and withdraw profits legally.
- The pilot runs for one year to assess risks and benefits before potential nationwide rollout.
Although cryptocurrency use as legal tender remains banned, this initiative signals a move toward greater financial integration and regulatory clarity.
Investment Growth and Market Potential
Kazakhstan plans to double its investment in cryptocurrency mining over the coming years. With an already established base of 17 officially operating mining farms, including Enegix’s 180 MW facility in Ekibastuz—one of the world’s largest—the country is poised for exponential growth.
Foreign investors, particularly from China, continue to explore relocation options despite travel restrictions. Many are successfully registering legal entities under activity codes such as:
- 63111 – Data hosting and related services
- 62032 – Management of information and communication equipment
These codes facilitate compliant entry into Kazakhstan’s digital economy.
Frequently Asked Questions (FAQ)
Q: Is cryptocurrency legal in Kazakhstan?
A: Yes—cryptocurrencies are recognized as digital assets (property), though they cannot be used as legal tender. Trading and holding are permitted under certain regulations.
Q: Can Chinese miners legally operate in Kazakhstan?
A: Absolutely. While physical relocation may be restricted, Chinese entrepreneurs can register legal entities in the AIFC and manage operations remotely through hosting or management agreements.
Q: Are there any limits on mining hash rate?
A: No. Kazakhstan imposes no restrictions on hash rate or computational power, making it ideal for large-scale mining farms.
Q: What taxes do miners pay?
A: A flat rate of 1 tenge per kWh consumed, plus a 1% royalty fee under the Astana Hub regime. Corporate taxes are otherwise waived for qualifying tech park residents.
Q: How long does company registration take in AIFC?
A: Typically 3–5 business days after submitting all required documentation.
Q: Can I open a bank account for my crypto business?
A: Yes—through AIFC-registered banks participating in the ongoing pilot program with crypto exchanges.
👉 Start your compliant mining journey today in a stable, forward-thinking jurisdiction.