Tokayev Signs Law on Banking and Digital Asset Regulation in Kazakhstan

• Kazakhstan introduces regulation of digital financial assets and cryptocurrencies.
• The status of the digital tenge as a form of national currency has been confirmed.
• Banking regulations have been brought into line with international standards.

President Kassym-Jomart Tokayev has signed laws “On Banks and Banking Activities in the Republic of Kazakhstan” and “On Amendments and Additions to Certain Legislative Acts on the Regulation and Development of the Financial Market, Communications, and Bankruptcy.” The documents are aimed at developing fintech and liberalizing the circulation of digital assets.

The new banking law is the result of five years of reform of banking regulation and supervision.

It consolidates the transition to international standards of financial stability, competition, digitalization, and consumer protection. In addition, the document reflects the institutional transformation of the banking sector and the updating of the supervisory model, the government noted.

One of the key areas of reform was the introduction of proportional regulation. Kazakhstan is introducing basic and universal banking licenses, which should reduce market concentration and simplify entry for new participants.

Institutions with a basic license will be subject to restrictions on assets and capital, as well as simplified supervisory and reporting requirements.

A significant part of the law is devoted to the development of fintech and the regulation of digital financial assets. For the first time, their circulation is permitted within the country, and a legal regime is being introduced for three types of assets, including stablecoins, the requirements for which will be set by the National Bank.

Digital platform operators will become new financial market entities and will be subject to licensing.

The circulation of unsecured digital assets is regulated separately. It is envisaged that licensed exchanges will be created and a list of permitted cryptocurrencies and transaction limits will be established. Infrastructure market participants will be included in the financial monitoring system for AML/CFT purposes.

The law also establishes the status of the digital tenge as a new form of national currency, the circulation of which will be determined by the National Bank. At the same time, the national payment infrastructure is being modernized, including open banking and mobile payment systems.

The reform also affects other areas, such as the development of Islamic banking, the introduction of risk-based behavioral supervision, and the creation of a single financial ombudsman. A new mechanism for resolving insolvent banks is also being introduced.

The authorities expect that the changes will increase the stability of the banking system, strengthen competition, and create conditions for innovation in the financial sector.