The Central Bank of Kazakhstan is considering investing gold and foreign exchange reserves into cryptocurrency assets.
This is a strategy aimed at increasing returns by referencing the experiences of large investment funds worldwide. Kazakhstan also plans to establish a national cryptocurrency reserve fund to hold seized digital assets and mining sources.
MAIN CONTENT
The Central Bank of Kazakhstan is considering using cryptocurrency in its national reserve investment portfolio.
The policy learns from the experiences of large funds like Norway, the USA, and the Middle East to minimize risks.
The national cryptocurrency reserve fund is formed from seized digital assets and those mined by state enterprises.
What does Kazakhstan plan to do with cryptocurrency assets in the national reserves?
The Central Bank of Kazakhstan is researching the investment of a portion of gold and foreign exchange reserves into cryptocurrency assets to diversify its portfolio and increase profits. This is a carefully considered step based on international experience and assessing the risks of the cryptocurrency market.
According to Mr. Timur Suleimenov, Governor of the Central Bank of Kazakhstan, the country holds a large amount of gold and foreign currency reserves that could be used to replace part of the traditional investment portfolio with cryptocurrency-related assets.
"Kazakhstan will not rule out replacing part of its gold and foreign currency reserves with investments in the cryptocurrency industry, but will do so cautiously due to the high volatility of this asset class."
Timur Suleimenov, Governor of the Central Bank of Kazakhstan, 14/07/2024
How does Kazakhstan's cryptocurrency investment strategy compare to global funds?
Kazakhstan's strategy is based on analyzing the experiences of large sovereign wealth funds in Norway, the United States, and the Middle East, where a portion of their portfolio is invested in cryptocurrency or related ETFs.
Mr. Suleimenov stated that some of these funds invest directly in digital assets, while others choose to invest indirectly through stocks and ETFs, but the proportion remains limited to balance profit and risk.
Why did Kazakhstan establish a national cryptocurrency reserve fund?
The national cryptocurrency reserve fund aims to hold seized digital assets and cryptocurrencies mined from state-owned enterprises. This is an innovative project in managing digital assets at the national level.
Mr. Suleimenov announced at the end of June 2024 that this fund would collect tokens seized in legal cases and cryptocurrencies mined by state-owned mines, contributing to increased transparency and efficiency in managing digital assets.
"We expect the national cryptocurrency reserve fund to become an effective storage tool while contributing to the development of Kazakhstan's digital ecosystem."
Timur Suleimenov, Governor of the Central Bank of Kazakhstan, 30/06/2024
Risks and opportunities from investing in cryptocurrency in the national reserve portfolio.
Cryptocurrency assets have high returns but also carry many potential fluctuations. The Central Bank of Kazakhstan emphasizes the need for a cautious strategy, avoiding overly rapid or excessive investment so as not to negatively impact the financial stability of the country.
Choosing a small portion in the investment fund of the reserve portfolio to diversify and leverage the opportunity for increased profitability reflects a deep understanding of balancing risk and benefits.
For example, other countries invest in cryptocurrency in their reserve funds.
Many countries, typically like Norway through the National Wealth Fund, the United States with investment funds, and some Middle Eastern countries have looked to cryptocurrency as part of a diversified investment portfolio. They use a cautious and scientific approach to leverage the advantages of new technologies while ensuring capital safety.
Comparison table of countries in cryptocurrency asset investment.
Country Investment Form Caution Level Notes Kazakhstan Direct investment part of gold, foreign exchange reserves, national reserve crypto from seized assets and mining Balanced, thorough research before implementation Governor Timur Suleimenov leads the strategy Norway Indirect investment through stocks, cryptocurrency-related ETFs Cautious, small proportion The National Wealth Fund is valued at 1 trillion USD USA Private funds, direct investment and ETFs Diversification, risk dispersion Many reputable corporations and investment funds are involved
Frequently Asked Questions
How much capital does Kazakhstan plan to allocate for cryptocurrency investment?
The Central Bank has not disclosed specific figures but emphasizes moderate-scale investments with cautious and effective goals.What risks does this investment pose to the national reserves?
The main risks stem from price volatility and low liquidity of some cryptocurrencies.What is the national cryptocurrency reserve fund used for?
The fund holds seized cryptocurrency assets and those from state-owned enterprises' mining activities to increase transparency and optimize management.What does Kazakhstan learn from foreign funds?
They apply a strategy that balances profit and risk, choosing both direct and indirect investment forms through ETFs and cryptocurrency stocks.Does the investment strategy affect financial stability?
The central bank is committed to being cautious, not accelerating investments to ensure the stability of the economy.
Source: https://tintucbitcoin.com/kazakhstan-dau-tu-tai-san-tien-dien-tu/
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