About Astana International Financial Centre
The Astana International Financial Centre is a regional hub for business and finance within the financial services industry. It offers a legal and regulatory environment designed to facilitate business operations and attract investments without focusing on specific product names or technical language. The Centre primarily serves sectors such as banking, asset management, capital markets, Islamic finance, and fintech. It is based in Nur-Sultan, Kazakhstan.
Latest Astana International Financial Centre News
Jan 17, 2024
To print this article, all you need is to be registered or login on Mondaq.com. In light of the global wide spreading and active use ofcryptocurrencies, referred to as "digital assets", local(Kazakhstan) legislator acknowledges that introducing effectivelegal frameworks is essential. Adopting the Law on DigitalAssets1marked a pivotal milestone, prompting thedevelopment of supplementary legal acts to delineate implementationprocedures. Kazakhstan is committed to fostering abusiness-friendly environment, aligning with a strategic goal ofenhancing competitiveness among other states. Kazakhstan has implemented comprehensive regulations for digitalassets, focusing on AML/CFT measures, permitting processes, anddetailed guidelines for stakeholders. These efforts aim to create asecure environment, classify clients, and set strict standardsencouraging accountable participation in the digital assetindustry. Financial monitoring and AML/CFT The AML/CFT Regulations for digital asset activities have beenspecifically approved as part of the Anti-Money Launderingmeasures2. Those involved in digital asset activities,including clients and related transactions, are subject tofinancial monitoring.3 Key indicators have been established to prevent criminal use ofdigital assets, such as depositing assets with an exchange andpromptly excluding them, exchanging assets for fiat currency at aloss, and using funds from unregistered or improperly licensedcryptocurrency exchanges4. Notably, violations of these AML/CFT requirements incurliability under the Code on Administrative Offences5 andCriminal Code6. Permit for the Issuing and Circulating of Secured DigitalAssets Under Kazakhstani legislation, acquiring a permit is mandatoryfor issuing and circulating secured digital assets. This permit,outlined by the Permission Rules7, requires individualsor legal entities to apply to the Electronic Licensing platform ofthe Republic of Kazakhstan (elicense.kz ). Applicants shall possess requisite server equipment (at least 5blockchain network nodes), an algorithm for node recordverification, and documentation substantiating copyrightownership. The Permit is granted for three years. Provision of Information To facilitate government inspections and preventive measures,state authorities have developed checklists for variousentrepreneurial activities, including those related to digitalassets, which have been integrated into the EntrepreneurCode8. These checklists have received approval forminers9 and individuals engaged in issuing andcirculating secured digital assets10. Furthermore, specific procedural requirements and documentationforms have been specified for digital asset exchanges and otherstakeholders within The Astana International Financial Centre(AIFC)11. Expanded list of Secured Digital Assets The List of recognised secured digital assets in the Republic ofKazakhstan acknowledges two categories of digital assets withinKazakhstan: those secured by property and those secured byservice12. However, Kazakhstani legislation still doesnot provide any regulations related to prominent cryptocurrencieslike Bitcoin, Litecoin, Tether, Ethereum, etc. Meanwhile,anticipated revisions are underway within the AIFC framework. AIFC Regulation The Astana Financial Services Authority (AFSA) has exemptedcrypto exchanges and licensed providers within AFSA's FintechLab from seeking approval to trade digital assets featured in the"Green List" on their platforms. This list comprisessixty-seven digital asset names authorised for trading during thetesting phase of Digital Asset Trading Facilities licensed withinAFSA's FinTech Lab (https://orderly.myafsa.com/). While this progresses, the AIFC is actively developingregulations for digital assets. Consequently, AFSA has initiatedthe Pilot Project to comply with the Constitutional Law of theAstana International Financial Centre and collaborate with stateregulators 13. This venture aims to foster cooperationbetween crypto exchanges and second-tier banks in Kazakhstan. To finalise the Pilot Project, among other initiatives, the AIFCreleased a Consultation Paper on 5 October 2023, addressing the"Rules and mechanisms of cooperation of Unbacked Digital AssetExchanges and/or the Centre Participants authorised to carry outdigital assets-related activities with second-tier bank of theRepublic of Kazakhstan" (hereinafter referred to as the"Rules"). These Rules outline the definitions of Unbacked Digital AssetExchange (or "Digital Asset Trading FacilityOperator") as a participant in the Astana InternationalFinancial Centre licensed to conduct regulated operations inOperating a Digital Asset Trading Facility under the AIFC acts. A digital Asset Service Provider is an AIFC participant licensedby AFSA to engage in regulated activities, including operating aDigital Asset Trading Facility, under the AIFC acts. Opening of a Bank Account and Monitoring of Transactions The Rules will oblige to the opening of bank accounts insecond-tier banks within the Republic of Kazakhstan (hereinafterreferred to as "Kazakhstani banks") to safeguardclients' funds in Kazakhstan Tenge (KZT) and/or foreigncurrency. Clients' funds must be segregated from those ofDigital Asset Trading Facility Operators or Digital Asset ServiceProviders, maintaining distinct bank accounts. Clients engaging with a Digital Asset Trading Facility Operatoror Digital Asset Service Provider are prohibited from conductingspecific transactions: third-party deposits and withdrawals; withdrawing fiat currency from the virtual account(representing a client's cash balance at a digital assetexchange) to a third party's bank account. Furthermore, transferring funds between two distinct client bankaccounts within Kazakhstani banks is permissible only uponconfirmation of ownership by the client. This requirement applieswhen clients withdraw funds from the Digital Asset Trading FacilityOperator or Digital Asset Service Provider. Clients are obligated to furnish information regarding thesource of their funds upon request by a Digital Asset TradingFacility Operator or a Digital Asset Service Provider. These regulations also outline specific prerequisites foradmitting Digital Assets to trading, encompassing documentrequisites, compliance with FATF guidelines, global statusadherence, and other stipulated criteria. Classification of Clients Retail Clients; Market Counterparties. Subsequently, the Digital Asset Service Provider will informclients of their classification. This categorisation aligns withthe stipulated classification criteria outlined in the relevantguidance. Importantly, an individual may fall into multiple clientcategories simultaneously. Requirements for Digital Asset Service Providers and DigitalAsset Trading Facilities The Minimum capital requirements for Digital Asset ServiceProviders range from USD 10,000 to USD 250,000, contingent upon thenature of correspondence activities conducted. Additionally, the minimum capital prerequisite for Digital AssetTrading Facilities is set at either (i) above USD 200,000 or (ii)equivalent to adequate working capital in fiat currency, enablingsustained operations for 12 months. This requirement aligns withrealistic business forecasts encompassing diverse marketconditions, including negative and positive scenarios. Restrictions and Prohibitions The Rules stipulate that resident legal entities of Kazakhstanare restricted from conducting operations on AIFCDigital Asset Trading Facility Operators' platforms, withexceptions granted to Kazakhstani entities engaged in digitalmining, mining pools, and AIFC Participants. Additionally, individual residents of Kazakhstan, classified asRetail Clients, are limited to investing a maximumof USD 1,000 per month across all digital assets. These RetailClients are also barred from utilising margin trading services.However, they can receive digital asset transfers from Kazakhstanibusiness entities via loyalty program bonuses, provided the monthlyinvestment limit of USD 1,000 is not exceeded. Furthermore, AIFC Participants licensed by AFSA areprohibited from advertising Initial TokenOfferings among Kazakhstani residents. It's important to notethat these rules are subject to discussion until the final versionis ratified. The Astana International Financial Centre approved the Rules onDigital Asset Activities (DDA) on 10 September 2023, which are setto be enforced from 1 January 2024. The DDA establishes guidelinesfor regulated activities concerning digital assets within the AIFC,encompassing general recommendations, internal documentrequirements, and other regulations. Kazakhstan's regulatory framework for digital assetsdemonstrates a careful balance between fostering innovation andupholding security measures. It aims to facilitate a conduciveenvironment for digital asset enterprises while ensuring compliancewith anti-money laundering, counter-terrorism financing measures,and regulatory standards. The forthcoming Rules on Digital AssetActivities (DDA) will further refine guidelines for organisationsinvolved in regulated activities pertaining to digital assetswithin the AIFC. Through collaboration between financial institutions and digitalasset platforms, coupled with stringent monitoring and controlmeasures, Kazakhstan endeavours to encourage responsible engagementin the digital asset sphere, prioritising investor protection andregulatory adherence. Footnotes 1. Law of the Republic of Kazakhstan "On DigitalAssets" No. 193-VII dated 6 February 2023 2. Joint Order of the Chairman of the FinancialMonitoring Agency of the Republic of Kazakhstan No. 20 dated 28February 2022 and the Minister of Digital Development, Innovationand Aerospace Industry of the Republic of Kazakhstan No.68/НҚ dated 28 February 2022 3. Chapters 4 & 5 (Ibid 2) 4. Chapter 2 (Ibid 7) 5. Article 214 of the Code of the Republic of Kazakhstanon Administrative Offences No. 235-V dated 5 July 2014 6. Article 218 of the Criminal Code of the Republic ofKazakhstan No. 226-V dated 3 July 2014 7. Order of the Minister of Digital Development,Innovation and Aerospace Industry of the Republic of Kazakhstan No.130/НҚ dated 01 June 2023 8. Article 138.117) of the Entrepreneurial Code of theRepublic of Kazakhstan No. 375-V dated 29 October 2015 9. Joint Order of the Minister of Digital Development,Innovation and Aerospace Industry of the Republic of Kazakhstan No.164/ НҚ dated 25 April 2023 and the Minister ofNational Economy of the Republic of Kazakhstan No. 49 dated 26April 2023 10. Joint Order of the Minister of Digital Development,Innovation and Aerospace Industry of the Republic of Kazakhstan No.172/ НҚ dated 8 June 2023 and the Minister of NationalEconomy of the Republic of Kazakhstan No. 106 dated 12 June2023 11. The Order of the Deputy Prime Minister - Minister ofFinance of the Republic of Kazakhstan dated 31 July 2023 No.817 12. Letter from the Minister of Digital Development,Innovation and Aerospace Industry of the Republic of Kazakhstandated 14 June 2023 No. ZhT-2023-01034314 13. The Constitutional Law of the Republic of Kazakhstan"On the Astana International Financial Centre" No. 438-Vdated 7 December 2015 The content of this article is intended to provide a generalguide to the subject matter. Specialist advice should be soughtabout your specific circumstances. AUTHOR(S)
Astana International Financial Centre Frequently Asked Questions (FAQ)
Where is Astana International Financial Centre's headquarters?
Astana International Financial Centre's headquarters is located at Mangilik El, Nur-Sultan.
Who are Astana International Financial Centre's competitors?
Competitors of Astana International Financial Centre include KMF and 6 more.
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