Kazakhstan Launches First Bitcoin Spot ETF in Central Asia

• Kazakhstan has introduced Central Asia’s first Bitcoin Spot ETF through the AIX.
• The ETF holds real bitcoin in secure US custody with insurance coverage reaching $250M. 
• This launch joins Kazakhstan’s markets to investors seeking regulated and accessible BTC.

Kazakhstan, one of the world’s largest bitcoin mining hubs, has Central Asia’s first spot bitcoin exchange-traded fund, setting a new benchmark for the region’s crypto sector. The Fonte Bitcoin Exchange Traded Fund (BETF), issued by Astana-based Fonte Capital, began trading today on the Astana International Exchange (AIX), with pricing in U.S. dollars. 

The ETF directly holds Bitcoin and reflects its price movements, with U.S.-regulated BitGo Trust acting as custodian under the oversight of the Astana International Financial Centre.

Physically Backed Fund With Institutional-Grade Safeguards

Unlike exchange-traded notes, BETF is physically backed by actual bitcoins held in BitGo Trust’s offline cold storage and secure vaults, designed to protect against theft or technical breaches. The custodian provides insurance coverage of up to $250 million, offering additional protection to both institutional and retail investors.

The fund is legally known as non-exempt, making it available to a wide range of investors, including retail participants. This structure aims to broaden access to regulated crypto investments while maintaining strict asset security protocols.

AIFC’s regulatory framework enables licensed exchanges, custodians, and digital asset products to operate within its jurisdiction. According to BETF’s backers, this structure can protect assets from freezes related to international sanctions and reduce dependence on foreign issuers.

Kazakhstan’s Rapid Rise in the Crypto Sector

Kazakhstan’s popularity in the BTC industry went up after China’s 2021 mining ban, which resulted in major operators relocating. The country capitalized on abundant coal-powered electricity and favorable regulatory policies to become a top worldwide mining hub.

This open stance moves forward with the more cautious approaches of Uzbekistan and Kyrgyzstan, thus making Kazakhstan the most accessible Central Asian market for crypto investment. By introducing BETF, the nation aims to attract foreign capital while linking local markets to the global digital asset economy.

Its introduction means that Kazakhstan joins big jurisdictions such as the US, Canada, and Hong Kong, which have agreed on spot bitcoin ETFs. This rationalization provides investors with a simple, stipulated option of attaining bitcoin exposure without getting to deal with the private keys or functioning in the cryptocurrency exchanges.

Related: Kazakhstan’s National Bank Plans Crypto Reserve for Growth

Building a Broader Crypto Infrastructure

Beyond the ETF launch, Kazakhstan is working toward enlarging the crypto infrastructure. The AIFC is actively engaged in the establishment of crypto banking facilities, with legislative amendments underway to liberalize the circulation of digital assets and expand the platforms for crypto-related activities.

In April, Prime Minister Olzhas Bektenov stated that the rise of such institutions could propel demand for new specialists in areas of compliance, blockchain analytics, and anti-money laundering. He added that these changes would increase liquidity for both fiat and digital assets in the AIFC.

The government also intends to inaugurate a “CryptoCity,” a pilot zone wherein cryptocurrencies shall be used in day-to-day transactions. This endeavor further integrates digital assets into Kazakhstan’s economy and sustains them as a key hub in Europe-Asia relations.

Fonte Capital, registered with AIFC since 2022, manages diversified funds and considers BETF a simple and reliable way for investors to add Bitcoin to their portfolios. It might serve as a precedent for other developing markets if indeed the secure custody, regulatory oversight, and open market access demonstrations proceed in Kazakhstan.

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