Kazakhstan has approved the use of oil-field gas that would otherwise be flared to generate off-grid electricity for digital mining, opening a new energy source for the country’s crypto sector. The move came in a July decree signed by President Kassym-Jomart Tokayev and forms part of a wider package aimed at expanding regulated crypto activity and related financial infrastructure.

The same basic setup described in the decree, on-site power generation tied to container-scale computing, has also been used elsewhere as a stepping stone from Bitcoin mining into artificial intelligence infrastructure. While Kazakhstan’s order does not set AI as an explicit objective, the model has prompted questions about whether the country could eventually try a similar transition.

What the decree permits

The decree allows oil producers to turn stranded or wasted gas into off-grid electricity for digital mining, as long as those resources are not required for state purposes. In practical terms, it authorizes energy production at oil fields using gas that would otherwise be burned off, rather than sent into the main grid.

Beyond the energy provision, the order also proposes tax incentives for regulated crypto-related income and a framework for cross-border settlements using stablecoins. Work on those rules is set to involve the central bank and the Astana International Financial Centre.

A broader bid to attract capital

Kazakhstan’s Ministry of Artificial Intelligence and Digital Development has framed the initiative as part of a larger effort to make the country more appealing to international capital and expertise. At the same time, officials have said the approach should preserve transparency and protections for participants.

The country already ranks among the world’s top three locations for Bitcoin mining, according to the source article, and it has a regulated crypto market valued at more than $10 billion. Those existing foundations help explain why Astana is pairing energy policy with tax and settlement proposals rather than treating mining as a stand-alone issue.

Why observers see an AI angle

The possibility of an eventual AI computing strategy comes from the type of infrastructure the decree enables rather than from any direct language in the order. Off-grid power at the wellhead feeding modular compute equipment is the same general configuration that has supported both crypto mining and, later, AI data-center development in other cases.

The article points to Crusoe as the clearest example. The company began by using captured flare gas to power Bitcoin mining, then shifted toward AI infrastructure. In 2025, Crusoe sold its Bitcoin mining and flare-mitigation operations to NYDIG and moved further into AI, building a pipeline of more than 10 gigawatts of AI data centers. Its founders said the concept started with waste-methane capture for mining and evolved into powering AI facilities.

Limits and next questions

For now, Kazakhstan has approved a mining-focused energy arrangement, not an AI training program. The decree itself does not identify AI compute as the intended destination for this power, and the source article notes that the country’s grid has previously faced strain linked to mining activity.

That leaves the next confirmed step centered on implementation of the crypto measures already named: off-grid generation for mining, possible tax relief for regulated activity, and stablecoin settlement rules developed with the relevant institutions. Whether Kazakhstan later uses the same energy-first model to pursue AI infrastructure remains an open policy question rather than a declared plan.

Source: Cryptopolitan