Bitcoin Mining: Kazakhstan to Charge Crypto Miners to Fill Its Strategic Reserve

Paying their electricity bills in satoshis. This, in essence, is the market that the Kazakh government is offering to its Bitcoin miners with resolution No. 638 adopted on July 18. The text creates a status of "strategic digital mining": labeled operators will receive capped electricity quotas for ten years in exchange for 10% of their monthly cryptocurrency production. These assets will feed the national strategic reserve of crypto-assets promised by Astana. Effective date: August 1.

Key Points

• Resolution No. 638 grants "strategic" miners capped electricity quotas for ten years in exchange for 10% of their monthly crypto production.
• The assets collected via Astana Hub will be managed by the National Investment Corporation of the National Bank of Kazakhstan.
• The status requires a data center of at least 150 MW and machines of at least 150 TH/s, reserving the scheme for the largest operators.
• The mechanism comes into effect on August 1 and will supply the crypto strategic reserve desired by President Tokayev.

Capped Electricity in Exchange for 10% of Production

The mechanism, detailed by the Kazakh media Zakon.kz and reported by Bitcoin Magazine, is based on an acknowledged barter. Selected miners will sign an agreement with the public technology cluster fund Astana Hub, then purchase their electricity from referenced producers at prices capped by the regulated maximum tariff, under contracts that can last up to ten years.

In return, they will pay 10% of their mined crypto-assets each month, calculated after deducting electricity and transportation costs, excluding VAT. For interested parties, the promise is enticing. After the Chinese ban in 2021, Kazakhstan absorbed up to 13% of the global hashrate, before electrical network saturation, outages, and restrictions caused a painful exodus of mining farms. In a country where electricity was long the most contested commodity in the industry, ten years of guaranteed megawatts at capped prices is worth a tithe.

A Reserve Managed by the Central Bank with a Broad Mandate

The collected cryptocurrencies will not sit idle in a drawer at Astana Hub. They will be transferred to the National Investment Corporation, the financial arm of the National Bank of Kazakhstan, which will manage them within the strategic reserve. Its mandate is surprisingly broad: the reserve can invest in digital assets directly, in derivatives backed by these assets, and even in the capital of companies specializing in their development.

The maneuver is executed in two stages: a presidential decree signed by Kassym-Jomart Tokayev on July 7 set the framework, and the resolution of July 18 provides the plumbing. It concretizes a long-open project. The central bank had initially announced it would deposit cryptocurrencies seized by the judiciary into this reserve, before mentioning up to $350 million in investments in Bitcoin and crypto-assets. Bitcoin thus joins gold in the state’s coffers, as a full-fledged reserve asset.

A Club Reserved for Hashrate Heavyweights

The entry ticket will not be easy. To qualify for the strategic status, an operator must notably:

• own a mining data center with at least 150 megawatts of installed capacity;
• operate machines delivering a minimum of 150 terahashes per second per unit;
• employ qualified technical staff and have an on-site repair workshop;
• hold multiple internet access contracts and be up to date with their taxes.

These criteria effectively reserve capped rates for mining giants, leaving smaller operators out of the scheme. The bitcoin media outlet TFTC sees it as "a mining fee, not state accumulation by conviction." However, let’s keep in mind the country’s initiatives, local CBDC (central bank digital currency), soon to be used for public markets, stablecoin Evo (KZTE) pegged to the tenge and launched on Solana with Mastercard, not to mention the CryptoCity project in Alatau. While Washington fills its reserve with seized bitcoins, Astana has chosen to fill its own at the source, block by block, starting August 1.