Kazakhstan, Nationwide Bank and Securities Exchange Operations Suspended...Protests Intensify

"All Banks and Exchanges Except Central Bank Suspended Operations"
Internet Also Shut Down... Bitcoin Hashrate Plummets

[Image source=Yonhap News]

[Asia Economy Reporter Hyunwoo Lee] Economic turmoil is intensifying as Kazakhstan's central bank, facing increased political instability due to large-scale protests triggered by soaring inflation, announced the temporary suspension of operations at all banks and securities exchanges nationwide. The unrest in Kazakhstan, the world's second-largest Bitcoin mining country, has led to internet shutdowns, causing a sharp decline in the global Bitcoin mining power indicator, the hashrate.

According to Russia's TASS news agency on the 5th (local time), the National Bank of Kazakhstan stated in a press release that "all banks and securities exchanges nationwide, except for the National Bank, will temporarily suspend operations." The National Bank explained that this measure is to protect financial service consumers, considering the disruption in financial markets due to the declaration of a state of emergency and various obstacles caused by the internet shutdown.

Earlier, Kazakhstan experienced large-scale protests after the government announced a reduction in subsidies for liquefied petroleum gas (LPG) at the beginning of the year, which caused prices of major fuels and daily necessities to skyrocket. Thousands of protesters nationwide stormed government offices and took control of main roads, and it is reported that the military and police failed to suppress the protesters. The Kazakh government requested troop deployment from the Collective Security Treaty Organization (CSTO), a security alliance of six former Soviet states including Russia, and the CSTO also announced it would dispatch forces.

As political instability deepened and internet shutdowns were implemented in Kazakhstan, the global Bitcoin hashrate dropped by about 10%. According to CoinWarz, the Bitcoin hashrate fell from approximately 191 exahashes per second (EH/s) at 9 p.m. local time to 172 EH/s, a decline of about 10%. The hashrate refers to the computational power used for Bitcoin mining. Kazakhstan holds the second-largest share of the hashrate at 18.1% worldwide.

Prices of major cryptocurrencies, including Bitcoin, are also plummeting. According to Coindesk, Bitcoin is trading at $43,150.85, down 6.9% from the previous day, and Ethereum is down 8.97% to $3,463.16, continuing the downward trend.

This content was produced with the assistance of AI translation services.