The Kraken Kazakhstan approval moved a step closer on Thursday, when parent company Payward announced it had received in-principle regulatory approval for its local subsidiary to operate in the Central Asian country. The preliminary sign-off from the Astana Financial Services Authority would permit Payward Kazakhstan to run a trading venue for digital assets, deal in investments both as principal and as agent, and offer custody services inside the Astana International Financial Centre.
The decision matters because it shows how Kazakhstan's crypto market has changed. A country that once drew miners with cheap power and at one point controlled roughly 18% of global bitcoin mining activity is now attracting international trading firms that want to operate under financial regulation rather than simply tap low-cost electricity.
What the Kraken Kazakhstan approval covers
According to Bitcoin.com News, the AFSA granted preliminary approval for Payward Kazakhstan to operate within the AIFC, the financial hub that has become the center of the country's regulated digital asset strategy. The authorization spans three business lines: running a venue for trading digital assets, dealing in investments on both a principal and agency basis, and safeguarding client assets through custody services.
The Kraken Kazakhstan approval is not yet a final operating license. Payward still has to meet the regulator's remaining requirements before it can begin licensed activity in the country, according to Bitcoin.com News. That means the announcement marks an early regulatory milestone rather than the start of commercial operations.
If final authorization is granted, clients based in Kazakhstan would be connected to Kraken's global order books. That would link local trading activity to the exchange's liquidity across Europe, the United States and Asia, Bitcoin.com News reported, giving local users access to the same pool of buyers and sellers as customers in larger markets.
Ripley comments on the process
Dave Ripley, co-CEO of Payward and Kraken, said the regulators had engaged closely with the company during the application. "The AFSA and AIFC teams have been constructive and rigorous throughout this process, and we appreciate the engagement," Ripley said, according to Bitcoin.com News.
The comments suggest Payward sees the AIFC framework as a workable route into the market. The company is preparing to enter Kazakhstan at a time when the government is steering the sector toward regulated exchanges, custody businesses and other crypto infrastructure rather than mining alone, according to Bitcoin.com News.
Kazakhstan shifts from mining hub to regulated market
Kazakhstan became a major destination for bitcoin mining after China's 2021 crackdown pushed operators across the border. At its peak, the country captured approximately 18% of global hashrate, helped by historically inexpensive electricity, abundant fossil fuels and available industrial facilities, Bitcoin.com News reported.
That mining boom also put pressure on the national electricity grid. Authorities responded with additional fees, licensing requirements and tighter supervision of the industry, according to Bitcoin.com News. The result was a sharp change in the government's approach, from welcoming miners to imposing stricter oversight on the sector.
The country's position in mining has since faded sharply. Data from the global heatmap published by hashrateindex.com shows Kazakhstan now accounts for 1.6% of the network's compute, down from nearly one-fifth of global bitcoin mining activity in 2021, Bitcoin.com News reported. The decline underscores how far the country has moved from its earlier role as a mining powerhouse.
Why Kraken wants in
For Kraken, the appeal is access to a market that is trying to formalize its crypto sector under a dedicated financial regime. The Kraken Kazakhstan approval would let the exchange bring trading, investment services and digital asset custody into a country that has shifted from courting miners to building a regulated cryptocurrency industry, according to Bitcoin.com News.
The move also fits a broader change in the types of companies seeking entry. Where crypto firms once came mainly for cheap electricity, international trading firms are now looking for permission to operate under the country's financial rules, Bitcoin.com News reported. That shift helps explain why a global exchange would pursue a license in a market once known mostly for mining.
If Payward secures final authorization, Kraken plans to connect Kazakh traders to its global liquidity network. That would give local clients access to the same order books used by the exchange's customers in larger markets, according to Bitcoin.com News, rather than operating as a standalone local venue.
What happens next
The next step is for Payward to satisfy the AFSA's remaining conditions and convert the in-principle approval into a full license. Until that happens, the company cannot start licensed operations in Kazakhstan, according to Bitcoin.com News.
Once authorized, the exchange would be able to offer trading, investment services and custody through the AIFC framework. That would mark a formal entry into a market that has spent the past several years moving away from its mining-heavy past and toward regulated digital asset businesses, Bitcoin.com News reported.
Conclusion
Payward's in-principle approval gives Kraken a path into Kazakhstan, but not yet a license to operate. The company still has to meet the AFSA's remaining requirements before it can launch trading, investment and custody services in the country.
If final authorization is granted, Kazakhstan-based clients would be connected to Kraken's global order books and liquidity across Europe, the United States and Asia. The next concrete step is the regulator's final approval.
Frequently Asked Questions
What did Kraken's parent company Payward get approval for in Kazakhstan?
Payward secured preliminary backing from the Astana Financial Services Authority for its local unit to run a digital asset trading venue, handle investment business on both its own account and for clients, and safeguard crypto assets through custody inside the Astana International Financial Centre.
Is the Kraken Kazakhstan approval a full license?
No. The approval is preliminary, not a final operating license. Payward must still satisfy the regulator's remaining requirements before it can begin licensed activities in Kazakhstan.
Why is Kazakhstan important in crypto?
Kazakhstan became a major bitcoin mining hub after China's 2021 crackdown and at one point controlled roughly 18% of global hashrate. It has since tightened oversight and shifted toward building a regulated digital asset industry through the AIFC.
How much bitcoin mining does Kazakhstan still control?
Kazakhstan's share has fallen sharply. According to the global heatmap from hashrateindex.com cited by Bitcoin.com News, the country now accounts for 1.6% of the network's compute, down from roughly 18% at its peak in 2021.
What would Kraken offer in Kazakhstan if fully authorized?
If Payward receives final authorization, clients in Kazakhstan would be linked to Kraken's global order books, tying local trading activity into liquidity across Europe, the United States and Asia.