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New legislation seeks to establish the jurisdiction as a regional hub for regulated digital finance by offering a legal environment that could attract both domestic and international players.
Kazakhstan’s new banking law represents a significant modernisation of the country’s financial system, formally integrating cryptocurrencies and digital financial assets into the mainstream financial sector and marking the end of a five-year transition towards a more innovation-focused model of finance.
The law introduces digital financial assets (DFAs) as a new class of regulated assets, bringing tokenised instruments, stablecoins and other blockchain‑based assets into the legal fold.
It defines three types of DFAs: stablecoins backed by fiat, assets backed by financial instruments or property, and electronic financial instruments issued on digital platforms.
Operators of digital platforms will be subject to licensing and supervision by the National Bank of Kazakhstan. Requirements for risk management, disclosure and investor protection that apply to traditional financial instruments will similarly apply to these digital assets.
Importantly for the cryptocurrency market, the law also establishes a framework for licensing and regulating cryptocurrency exchange operations.
Unsecured digital assets, including Bitcoin and other major cryptocurrencies, will be tradable through licensed crypto exchange organisations, whose activities will be regulated by the central bank.
The National Bank is empowered to determine a list of approved cryptocurrencies permitted for circulation and set operational limits, investor protections and anti‑money laundering (AML) rules for crypto service providers.
Crypto exchange operators and other market participants in the digital‑asset ecosystem will be included in the list of entities subject to financial monitoring.
In addition to private digital assets, the law formally recognises the digital tenge, Kazakhstan's central bank digital currency (CBDC), as a legally sanctioned form of national currency.
The digital tenge is intended to complement cash and traditional electronic payments, enabling faster, cheaper and more secure transactions.
Is the system ready?
The adopted bill is a breakthrough for the crypto industry, but work still needs to be done to ensure the new financial system’s smooth operation.
“The degree of practical readiness of the legislation will depend on the level of detail of secondary legislation and enforcement practice,” said Alibek Slan, senior lawyer with Revera, a law firm.
He warned that, in the presented model, some issues require further clarification: the tax regime for transactions with digital assets, accounting and storage; the procedure for protecting investor rights in the event of insolvency of operators; and the regulation of cross-border transactions.
“These elements are traditionally clarified at the regulatory detailing stage,” Slan said.
Anatoliy Bakhirev, managing partner of Law & Justice, another law firm, told Vixio that several legal questions about the new legal system remain unanswered.
For example, Bakhirev warned about uncertainty regarding payment rights. “If payment for goods and services in cryptocurrency is only permitted experimentally, this will require clear legal codification in laws and regulations,” he said.
A separate issue is liability. For instance, Bakhirev noted, if a client of a crypto exchange loses funds, is subject to fraud or is involved in illegal activities, there must be a legal mechanism for liability, which is currently absent.
Transition is over
Over the past five years, cryptocurrency has been legal in Kazakhstan only within the Astana International Financial Centre (AIFC), a separate jurisdiction operating under a discrete legal regime created specifically for the development of fintech innovation.
Fedor Ivanov, head of the analytical department at consultancy Shard, said that during this long transition period, the system has been thoroughly trialled.
“The AIFC has tested regulatory and oversight mechanisms for the technology, consistently introduced new products, evolved from traditional crypto exchanges to crypto cards and integrated banks into the crypto industry,” he said, adding that the system is fully ready from a regulatory point of view.
Maintaining balance
In the regulatory sphere, the main risk remains the need to maintain a balance between control and market development, Slan said.
“Strict licensing requirements and compliance burdens can impact the attractiveness of our jurisdiction, while insufficient control increases risks for investors and the financial system. So, the key factor will be the quality of secondary regulation and the consistency of its application,” he added.
For payments firms, this initiative signifies a gradual transformation of the operating environment: a legal digital asset segment will emerge, enabling them to build a settlement infrastructure and launch new products, including services based on stablecoins and digital tenge, Slan explained.
“At the same time, competition from banking ecosystems will intensify, and the regulatory burden will increase, primarily in terms of licensing, financial monitoring and risk management," he noted. “Opportunities lie in expanding the client base, integration with digital platforms and participation in the digital tenge infrastructure”.
However, Slan added, players should carefully consider the distinctions between the legal regimes of different types of digital assets and assess whether their activities are subject to requirements for obtaining a separate license or compliance with special regulations.
Enforcement remains the key
Even a well-designed legal system does not guarantee market uptake. Although the new law represents a breakthrough for Kazakhstan’s crypto industry, experts stress that its practical success will depend on the rollout of secondary regulations and consistent enforcement.
“We need to monitor how the market develops and whether there are any obstacles at the law enforcement level,” Ivanov said.
In Uzbekistan, for example, cryptocurrency has been legal since 2018, but the market there is still less developed than in Kazakhstan or Kyrgyzstan, primarily due to law enforcement and legislative restrictions, which only become clear once you begin to delve into the practice, he added.
Although some issues are yet to be solved, Kazakhstan’s new legislation positions the country as a regional hub for regulated digital finance, offering a legal environment that could attract both domestic and international players eager to participate in the emerging digital asset economy.
