Kazakhstan eyes CryptoCity; Stablecoin payment volume soars
Kazakhstan has confirmed plans to establish a digital asset pilot zone to test the viability of mainstream adoption as the country marches toward full-scale digitalization.
Kazakh President Kassym-Jomart Tokayev unveiled the initiative in a keynote address at the Astana International Forum 2025, noting that it will serve as a sandbox for digital assets. Dubbed CryptoCity, the project will be situated in Alatau, a budding technology hub in Southeastern Kazakhstan.
Upon launch, residents and corporations will be allowed to buy, sell, and hold digital currencies without restrictions. Furthermore, authorities will permit digital assets to be used for the payment of goods and services within CryptoCity.
'We are planning to create a pioneering pilot zone called CryptoCity where cryptocurrencies might be used for purchasing goods, services, and beyond,' said President Tokayev.
Kazakh Minister of Digital Development Zhaslan Madiyev echoed the president's sentiments on the project's scope while expressing optimism that it will attract foreign-based developers and IT specialists to set up operations in the country.
There are also plans to offer tax breaks and a string of regulatory and financial incentives for fledgling Web3 firms keen on operating from the incoming CryptoCity. Madiyev says the plans will be codified into law, signaling the country's intent to transform into a digital asset hub.
Apart from the perks associated with the sandbox, its location in the fast-developing city of Alatau is tipped to lure in a large number of digital asset firms.
'CryptoCity implies free circulation of cryptocurrency, crypto-friendly legislation, and crypto as a legitimate means of payment,' said Madiyev. 'These conditions need to be reflected in the law.
Despite plans for a wholesale embrace of digital assets in the incoming Cryptocity, strict regulations stifle mainstream adoption nationwide. The latest project represents a significant opportunity to transform existing restrictive legislation surrounding the use of mainstream digital assets.
CryptoCity is not Kazakhstan's first push into digital assets. The country previously tagging its transformation into a digital currency hub as a national priority. Kazakhstan's short-term goal is regional dominance, and authorities are keen on improving Bitcoin mining operations. A Kazakh lawmaker has mooted the idea of a national digital asset bank while the country has rolled out a streak of Web3-based learning initiatives. Outside of Web3, the country has unfurled plans for artificial intelligence (AI), Big Data, and Internet of Things (IoT) technology.
Stablecoin payment volumes surge threefold
Stablecoin payment volumes are marching toward the $100 billion mark since 2023, driven by a raft of factors, but one stablecoin issuer holds a lion's share of the market.
According to a report by data analytics firm Artemis, $94 billion worth of stablecoin payments were processed between the start of 2023 and February 2024. Compared to the figures before 2023, stablecoin transaction volumes have surged nearly threefold, buoyed by changing consumer behaviour and innovation.
Business-to-business (B2B) transactions comprise a significant portion of the rising stablecoin transaction volume. The report notes that B2B transactions accounted for $36 billion worth of stablecoin transactions annually, with the report tipping the figure to grow in the coming years.
While B2B contributes the biggest slice, peer-to-peer (P2P) transactions are the second-largest drivers of stablecoin volumes. However, P2P volumes have remained largely stagnant since 2024, with B2B steadily rising to take the first spot.
Card payments linked to a stablecoin wallet also contribute a healthy share of payment volumes, while business-to-customer (B2C) is making a small impact on overall numbers.
In terms of stablecoin volume by distributed ledger, Tron holds the clear lead, closely followed by Ethereum in second place and Polygon in third. The report mentions Binance Smart Chain, Solana, Base, and Optimism as other active ledgers garnering significant payment volumes.
Tether's USDT has established dominance as the leading stablecoin of choice for P2P and B2B transactions with its first-mover advantage.
Circle's USDC ranks second with a market capitalization of $60 billion and is racking up a streak of regulatory approvals in the Middle East.
'Overall, stablecoins have established themselves as growing and significant components of the global payment infrastructure,' read the report.
Presently, the global stablecoin market capitalization sits at nearly $250 billion, growing by 50% over the last year.
While stablecoins are gaining significant traction globally, governments are eyeing a full embrace to remain ahead of the curve. In the United States, President Donald Trump has signaled an intention to use stablecoins to maintain the dominance of the U.S. dollar.
Furthermore, countries like Thailand are rolling out government-supported stablecoins to augment existing payment alternatives in their country. Latin American and African businesses are hurtling toward stablecoin adoption, independent of government backing, to hedge against currency volatility and devaluation.
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