The new Banking Law will create conditions for further development of the fintech sector and regulation of digital financial assets.

Madina Abylkassymova, Chairperson of the Agency for Regulation and Development of the Financial Market, during a presentation to the Majilis made this statement at a presentation to the Majilis of Parliament of the draft laws ‘Banks and Banking Activities in the Republic of Kazakhstan’ and ‘Changes and Amendments to Certain Legislative Acts of the Republic of Kazakhstan on the Regulation and Development of the Financial Market.’ The draft laws were developed for the purpose to implement the 2024 and 2025 Addresses of the Head of State.

Today, new models for provision of financial services undergo active development, including financial services through marketplaces and various forms of interaction between banks and fintech companies.

"The Banking Law provides for expanded opportunities for banks to invest in capital of fintech companies operating in digital technologies, e-commerce, cybersecurity, biometrics, artificial intelligence, and telecommunications. "Along with that, limits will be set on the size and stake of banks in the capital of these companies for such investments," the Agency Chairperson stated.

According to her, when a bank provides its technological infrastructure to another organization, the bank will bear on its own responsibility to clients of that organization for proper provision of the banking services.

"Key innovation of the draft law is introduction of regulation of digital financial assets (DFA) as a new asset class. The draft law envisages three types of DFA: the first are digital assets certifying claims to money – stablecoins; the second are digital financial assets backed by an underlying asset; and the third are financial instruments issued in digital form," emphasized Madina Abylkasymova.

The National Bank will regulate issue and circulation of stablecoins. The Agency is authorized to fix requirements for issue and circulation of digital assets backed by an underlying asset and financial instruments issued in digital form.

"Issue of digital financial assets will be carried out by digital platform operators. These are new financial market participants activities of which will be licensed by the National Bank," Chief of the financial regulator added.

Digital financial assets will be subject to requirements comparable to those established for traditional financial instruments, including risk management, disclosure, and investor protection. This will ensure transparency and reliability of their circulation.

"A significant block of amendments to the Draft Law is designed to upgrade the national financial infrastructure. Status of the digital tenge as a new form of national currency is legally fixed. The procedure for circulation and use of the digital tenge will be determined by the National Bank," the ARDFM Head stated.

Moreover, it envisages stricter regulation of payment organizations. It is planned to establish extra requirements to their capital and risk management systems.

The new Banking Law takes into account technological changes, growing role of the banking sector in economic financing, increased competition, and involvement of new market participants, as well as issues of promoting the fintech and liberalizing the circulation of digital assets.

Source : https://www.gov.kz/memleket/entities/ardfm/press/news/details/1070131?lang=kk