Cryptocurrency ownership is gaining popularity across Central Asia and the Caucasus, according to a report prepared by a group of financial services companies. Uzbekistan has the highest adoption rate for crypto assets in the regions and ranks 33rd globally.

The Russian-language report, titled Digital Assets in Central Asia and the Caucasus, shows that almost 1.5 percent of Uzbekistan’s population, or roughly 512,000 individuals, owns cryptocurrency. The 15 licensed cryptocurrency exchanges and outlets operating in Uzbekistan handled over $1 billion worth of transactions in 2024, the report adds. 

Just two years ago, Uzbekistan ranked 87th in global crypto adoption. In 2023, the country shot up to 25th in the world rankings before falling back to 33rd this year. Despite slipping, Uzbekistan still outpaces its Central Asian neighbors when it comes to crypto asset adoption. Kazakhstan ranked 57th in the world and Kyrgyzstan 76th, according to the report. Tajikistan and Turkmenistan were not ranked.

Kazakhstan’s ranking might be much higher, if not for a far-reaching government regulatory initiative covering cryptocurrency production and usage. No official data on crypto assets is available for Kazakhstan, but some independent estimates indicate 8 percent of the population may hold cryptocurrency.

In 2021, Kazakhstan emerged as a leading center for cryptocurrency mining following a crackdown in China on the practice, which requires immense amounts of electricity. By the fall of that year, Kazakhstan’s global Bitcoin hashrate, an indicator of the amount of power being used to produce cryptocurrency, was over 27 percent. During the same period, the country experienced power outages as the electricity grid buckled under the rising demand.

The Kazakh government in following years introduced measures to hinder crypto mining, including the introduction of steep tariffs for intensive power usage. As a result, the country’s Bitcoin hashrate fell to 4 percent in May 2023. 

The number of mining operations in Kazakhstan likewise plummeted between 2021 and mid-2023, going from 330 to 26. But over the past 15 months, the number of mining outfits have risen to 51, the report states. At the same time the government took steps to hinder mining, it introduced regulatory changes to enable officials to better monitor crypto transactions. In late 2023, Kazakhstan also introduced a digital currency under Central Bank supervision that is designed to compete with cryptocurrencies.

In the Caucasus, Georgia has the highest global ranking in crypto asset adoption, coming in at 54th. That position, however, is 17 spots lower than Tbilisi’s ranking in 2022. Armenia was 77th and Azerbaijan came in at 92nd, according to the report, which was sponsored by a variety of financial services entities, including Mastercard, KPMG and the National Payment Corporation of Kazakhstan.