Kazakhstan has become the first country in Central Asia to introduce a spot Bitcoin ETF — an exchange-traded fund whose shares can be bought and sold like ordinary securities, but each of which is backed by real cryptocurrency.
The new fund, the Fonte Bitcoin Exchange Traded Fund OEIC, launched by Fonte Capital, will begin trading on 13 August on the Astana International Exchange (AIX) under the ticker BETF.
Each share is backed by a physical bitcoin held in custody by the American custodian BitGo Trust. The storage is organised in offline cold storage vaults, and the assets are insured for up to $250 million, reducing the risks of hacks and losses. The fund's share price is denominated in US dollars.
The emergence of such a product is no coincidence: after China banned bitcoin mining in 2021 — the process of creating new bitcoins using powerful computers that solve complex mathematical problems — Kazakhstan became one of the world's largest players in this industry, capitalising on access to relatively cheap coal-fired electricity and flexible regulation.
FEATURES OF THE NEW FINANCIAL INSTRUMENT
Unlike traditional exchange-traded securities, BETF directly holds bitcoin and operates according to international security standards. The regulator is the Astana International Financial Centre (AIFC), whose jurisdiction, according to supporters, can not only protect assets from sanctions risks but also create a stable legal framework for the operation of digital assets.
The AIFC is already developing infrastructure that allows licensed exchanges, custodians, and investment products to operate legally in Kazakhstan. Against this backdrop, neighbouring countries in the region, such as Uzbekistan and Kyrgyzstan, are taking a more cautious stance, making Kazakhstan the most open crypto market in Central Asia.
ADVANTAGES FOR INVESTORS
The structure of BETF allows for in-kind settlements and a low total expense ratio with minimal tracking error relative to the market price of bitcoin. This simplifies access to cryptocurrency for both retail and institutional investors, relieving them of the need to store private keys themselves or use crypto exchanges. Now, an investor from not only Almaty but anywhere in the world with access to AIX can buy a stake in the fund.
INTERNATIONAL SIGNIFICANCE
The launch of BETF places Kazakhstan alongside the USA, Canada, and Hong Kong — countries that have already approved similar instruments. This is an important step for the cryptocurrency industry, making bitcoin a simpler and more convenient investment tool.
For Kazakhstan, this is not just a new financial product but also a step towards integration into the global digital asset economy, and for investors, an opportunity to add bitcoin to a portfolio in a highly regulated and protected environment.
Fonte Capital, registered in the AIFC in 2022 and already managing a range of diversified funds, says that the new initiative will ensure a high level of control and reliability when dealing with the world's most famous digital asset.