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The National Bank’s plan for widespread digital asset adoption could result in a comprehensive legal framework by early 2026, yet unanswered questions about cryptocurrency’s legal status suggest that significant work remains to be done.
Soon after announcing a plan to establish CryptoCity, a regulatory sandbox for testing and integrating cryptocurrencies into daily transactions, Kazakhstan has proposed further measures to embed digital assets into its financial system.
The Kazakhstan National Bank has drafted amendments to the Law On Payments and Payment Systems and the Law On Banks, introducing the concept of digital financial assets (DFAs) and laying the groundwork for the gradual expansion of regulated cryptocurrency use, local sources have told Vixio.
The document outlines three categories of DFAs: money-backed assets (primarily stablecoins), DFA derivatives and tokenised versions of traditional financial instruments.
The initiative would also allow banks to hold shares in DFA platform operators – legal entities authorised to issue DFAs and oversee their circulation, accounting, and storage – as well as to take stakes in DFA trading platforms.
At the same time, the National Bank confirmed that regulated cryptocurrency use will be channelled exclusively through licensed exchange providers, stressing that any activity outside these platforms will be prohibited.
By late 2025, the National Bank aims to approve the first stablecoins and support the launch of Kazakhstan’s inaugural cryptocurrency payment cards.
“The Kazakhstan Association of Payment Organisations welcomes the current trends of the cryptocurrency regulation,” said Bayangul Akimzhanova, chair of the Association of Payment Organisations, noting that its members had participated in several National Bank meetings on the issue.
According to Akimzhanova, regulators have conducted extensive research on current trends in the cryptocurrency market.
Currently, citizens may legally trade cryptocurrencies only through exchanges licensed by the Astana International Financial Centre. Yet researchers found that just 5% comply, with the vast majority using unlicensed platforms.
A shift towards liberalisation
Although Kazakhstan is moving towards cryptocurrency legalisation as part of broader digital asset adoption, Vitaliy Vetrov, managing partner at Vetrov & Partners, described the proposed system as “supervised legalisation”.
Vetrov explained that, under the proposed regulation, businesses and private investors are required to work only through licensed platforms and to accurately record and declare income, with those in breach subject to fines or criminal liability.
Judging from current trends, Kazakhstan is likely to have a fully-fledged legal framework for the cryptocurrency industry by 2026, Vetrov said.
He expects this to include detailed anti-money laundering (AML) and know-your-customer (KYC) regulations, the integration of banks into cryptocurrency transactions and a range of new financial instruments and services.
Before legalization becomes real, legislators in Kazakhstan need to answer several questions about the status of cryptocurrency, said Anatoliy Bakhirev, managing partner of Law & Justice, a law firm.
“For example, the question of whether cryptocurrencies are securities, commodities or a special type of property has not been fully resolved. This creates legal uncertainty and potential difficulties in taxation, inheritance and litigation.”
Kazakhstan is currently in a transition phase from strict restrictions and partial bans to a regime where cryptocurrencies and digital assets will be integrated into the legal and financial systems, albeit with certain limitations, Bakhirev added.
Vetrov agreed that the country is undergoing a significant transition, and warned that this is a perilous time for investors.
"The state is trying new things, but there is no stable security infrastructure yet," he said.
Launched by President Kasim Tokaev in May 2025, the CryptoCity sandbox is expected to operate in Alatau, in the country’s south-east. It will allow residents and businesses to carry out cryptocurrency transactions for goods, services, and even real estate under state supervision.
“The experience of creating CryptoCity in Alatau could serve as the basis for developing a more flexible and adaptable regulatory framework,” Bakhirev said.
Risks on the horizon
The upcoming cryptocurrency liberalization comes with certain risks, analysts have warned.
According to Vetrov, this involves an increase in fraud and money laundering due to a lack of controls, weak protection of investors and users from theft and cyberattacks and a lack of effective dispute resolution mechanisms.
In addition, he noted that the cryptocurrency segment in Kazakhstan suffers from uncertainty in judicial practice, as it is unclear how to qualify a transaction or dispute.
There are also issues with protecting property rights to tokens, and complex tax rules demand precise accounting. In addition, many users lack a comprehensive understanding of how to properly record crypto transactions.
The legalization of cryptocurrency also poses a risk to banks in Kazakhstan.
“High volatility in cryptocurrencies could pose a threat to the financial system, especially if they become widely used as a means of payment. A massive outflow of capital from traditional bank deposits to cryptocurrencies could weaken the financial system,” Bakhirev warned.
The Kazakhstan Bank Association declined to provide a comment about the risks associated with cryptocurrency legalization in response to Vixio's inquiry.
“In addition, legal challenges may arise due to the cross-border nature of cryptocurrencies, requiring cooperation with international regulators,” Bakhirev said. “It is also important to strike a balance between encouraging innovation and protecting consumers.”
Analysts believe legislators will need to adopt new regulations and amendments in the coming months to address the risks tied to broader cryptocurrency adoption.
Kazakhstan’s regulatory experiment may yet strike the balance between innovation and stability that many jurisdictions struggle to achieve, but the outcome remains uncertain.
