'We are the number two crypto miner in the world, and we see practically no financial return,' says Kazakhstan President Tokayev

During a meeting with representatives of the financial sector on Friday in Almaty, Kassym-Jomart Tokayev, President of Kazakhstan, expressed his opinion on the current state of affairs of the country's cryptocurrency industry. The details of the speech were posted on the official website of the President of the Republic of Kazakhstan, and translated by Cointelegraph:

Cryptocurrencies are an objective factor that cannot be simply ignored. It is necessary to clearly evaluate their potential to influence the current financial system.

President Tokayev speaking at a conference | Source: Akorda.kz

He then added:

Therefore, work should be resumed on the formation of a balanced regulatory environment for the creation of cryptocurrency exchanges in the country. Otherwise, it turns out that we are the number two country in the world for cryptocurrency [Bitcoin] mining, and we practically do not see financial returns.

According to data from the University of Cambridge, Kazakhstan's share of the Bitcoin (BTC) network's total hash rate amounts to 18.10% — the second in the world behind the United States (35.40%) and above Russia (11.23%). However, there exists a large number of individuals carrying on Bitcoin mining with disputed legal status in the country. Gray area miners account for as much as 50% of all cryptocurrency mining activity in Kazakhstan by some estimates.

In the context of President's Tokayev statements, the lack of cryptocurrency regulation results in, for better or worse, very little tax revenue being captured by the government despite the industry's sharp growth in recent years. Nevertheless, President Tokayev discussed the possibility of introducing a digital tenge as a "representative of the financial system" and further reiterated his support for fintech development in Kazakhstan:

Our financial institutions must seize the chance and tackle ambitious goals. It is necessary to not only copy someone else's experience but to develop and promote new formats of services that go beyond the borders of Kazakhstan. The state will do its utmost to promote these initiatives.