Kazakhstan Unveils CryptoCity to Pioneer Legal Crypto Payments

Bold initiative to launch in Alatau as government eyes broader reforms, including a national crypto bank.

Kazakhstan is charting a bold new path in the global crypto landscape with the launch of “CryptoCity,” a pilot zone designed to integrate cryptocurrencies into daily life—from restaurant payments to real estate purchases. Announced by President Kassym-Jomart Tokayev during the Astana International Forum 2025, the initiative positions the Central Asian country as a frontrunner in experimenting with legal crypto ecosystems.

A Strategic Move Toward Crypto Integration

CryptoCity will operate as a regulated sandbox for testing crypto use cases under real-world conditions. The initiative underscores Kazakhstan’s ongoing effort to diversify its economy by embracing financial technology and blockchain innovation.

“We are planning to create a pioneering pilot zone called CryptoCity where cryptocurrencies might be used for purchasing goods, services, and even beyond,” said President Tokayev, as per the official transcript published on May 29.

Though specific details remain scarce, the plan reflects a broader national strategy that began in earnest with the launch of Kazakhstan’s central bank digital currency (CBDC) pilot in early 2023. Since then, the country has developed key digital infrastructure, including the transformation of its Center for Interbank Settlements into the National Payment Corporation, responsible for developing the CBDC ecosystem.

Why Alatau? The Chosen Testbed for CryptoCity

According to Zhaslan Madiyev, Minister of Digital Development, the likely home for CryptoCity is Alatau, a new city in development near the southeastern border. Already a designated special economic zone and a technology hub, Alatau houses multiple research institutions, making it an ideal candidate for digital experimentation.

“Of course, the most promising place for CryptoCity is the new city of Alatau—it’s the president’s initiative,” Madiyev stated in an interview with local media.

Officials envision CryptoCity as a place where digital assets can be freely used as legitimate payment instruments. Madiyev highlighted practical applications including crypto-based payments in cafes and restaurants, real estate transactions, and investment activities—an ambitious leap beyond typical crypto use cases.

“I believe this could be a major breakthrough for the blockchain industry,” Madiyev noted, emphasizing that a comprehensive legal framework is now being developed to enable these capabilities.

Kazakhstan’s Evolving Digital Currency Landscape

Kazakhstan’s commitment to digital finance is not new. The country’s digital tenge pilot, launched in November 2023, involved real users—including banks and their clients—and relied on blockchain-based smart contracts to facilitate programmable payments.

Participating banks issued digital vouchers and payment cards, while partnerships with global firms like Binance helped test the CBDC with local merchants. These trials not only validated the technical viability of digital currencies but also laid the groundwork for more advanced applications, such as those envisioned in CryptoCity.

Binance has since expanded its footprint in Kazakhstan, contributing to local investment and operating a digital asset exchange within the country’s regulatory framework.

Legislative Push for a National “Crypto Bank”

The CryptoCity announcement comes amid growing calls for regulatory reform in Kazakhstan’s burgeoning crypto sector. On the heels of Tokayev’s unveiling, Member of Parliament Azat Peruashev proposed the creation of a state-backed crypto bank to ensure consumer protection and curb illicit activity.

Citing government data, Peruashev noted that over 90% of crypto transactions in Kazakhstan occur outside the legal sector, warning that this lack of oversight has enabled scam projects to thrive. A national crypto bank, he argued, could function as a regulated platform for exchange, custody, and transactions, helping to legitimize the industry.

Prime Minister Olzhas Bektenov confirmed that the government is actively exploring such institutions. These banks would operate under the jurisdiction of the Astana International Financial Centre (AIFC), leveraging licensed operators to offer secure digital asset services.

“Crypto banks could support exchange, storage, and transaction services, backed by licensed operators under the Astana International Financial Centre,” said Prime Minister Bektenov during a parliamentary session.

Enforcement vs. Innovation

While Kazakhstan has made headway in fostering legitimate digital finance, enforcement actions reflect the challenges of unregulated growth. In 2024, licensed crypto trading in the country totaled $1.4 billion, but a much larger volume—$4.1 billion—was transacted through unlicensed platforms.

To combat illicit activity, authorities shut down 36 unlicensed exchanges and blocked thousands of websites. Still, lawmakers argue that enforcement alone is insufficient without robust, transparent regulatory structures.

The proposed crypto bank, alongside CryptoCity, is seen as a dual approach to innovation and oversight: empowering legal market players while pushing illicit actors out of the system.

Building the Future of Finance

CryptoCity and the potential creation of a national crypto bank represent Kazakhstan’s attempt to position itself as a global leader in digital finance. By embracing both experimentation and regulation, the government aims to harness the benefits of blockchain while minimizing its risks.

The city of Alatau may soon become a living laboratory for the crypto economy—a place where policy, technology, and finance intersect. If successful, the initiative could not only transform Kazakhstan’s economic model but also provide a replicable template for other nations exploring real-world crypto adoption.

As the global debate around digital assets continues, Kazakhstan’s bold experiment is a reminder that innovation often begins at the frontier—where regulation meets ambition.