Digital currencies gaining traction in the heart of Central Asia and the Caucasus region
Central Asia and the Caucasus witness a surge in cryptocurrency ownership, with Uzbekistan leading the pack. A recently published report by a group of financial services companies reveals that almost 1.5% of Uzbekistan's population, approximately 512,000 individuals, own digital assets. This places Uzbekistan 33rd globally in crypto adoption, a significant leap from its 87th ranking just two years ago.
The report, titled "Digital Assets in Central Asia and the Caucasus,"further reveals that the 15 licensed cryptocurrency exchanges and outlets in Uzbekistan handled over $1 billion worth of transactions in 2024. Kazakhstan and Kyrgyzstan follow Uzbekistan in crypto adoption, with Kazakhstan ranking 57th and Kyrgyzstan 76th. Tajikistan and Turkmenistan were not ranked.
Kazakhstan's lower global ranking may be attributed to a wide-reaching government regulatory initiative concerning cryptocurrency production and usage. Despite the restrictions, independent estimates suggest that 8% of the population may hold cryptocurrency. The country's prominence in the global cryptocurrency mining industry cannot be overlooked, with its Bitcoin hashrate surging to over 27% in 2021. However, measures introduced by the government, such as steep tariffs for intensive power usage, helped reduce Kazakhstan's Bitcoin hashrate to 4% in May 2023.
The number of mining operations in Kazakhstan declined from 330 to 26 between 2021 and mid-2023. However, over the past 15 months, the number of mining outfits has risen to 51. Simultaneously, the government took steps to monitor crypto transactions and introduced a digital currency under Central Bank supervision to compete with cryptocurrencies.
In the Caucasus, Georgia has the highest global ranking in crypto asset adoption, at 54th. Armenia and Azerbaijan come in at 77th and 92nd, respectively. The report, sponsored by financial services entities like Mastercard, KPMG, and the National Payment Corporation of Kazakhstan, suggests that the region's increasing focus on digital infrastructure and financial inclusion could potentially foster a more favorable environment for cryptocurrency adoption in the future.
While Africa and Asia, particularly South Korea and Singapore, have seen significant crypto adoption, specific data on crypto adoption rates in Central Asia and the Caucasus, particularly focusing on Uzbekistan, Kazakhstan, and Georgia, remains limited. Ongoing research and market analysis would be necessary to provide a comprehensive insight into the current crypto landscape in these countries.
- Investors might find it intriguing to note that despite Kazakhstan's government regulations on cryptocurrency, approximately 8% of its population is estimated to own cryptocurrency.
- In the digital asset market, the report indicates that the 15 licensed cryptocurrency exchanges and outlets in Uzbekistan, having handled over $1 billion worth of transactions in 2024, have contributed significantly to its crypto adoption.
