Crypto-funded debit card in Kazakhstan

Definition: While not exclusively for digital assets, a PSP license is required for firms handling fiat-to-crypto and crypto-to-fiat conversions, remittances, or other payment-related services where digital assets are involved in the transaction flow. AFSA's rules define specific "payment services" that require licensing, and these can extend to services involving digital assets.

Key Services: Fiat-to-crypto on/off-ramps, crypto remittances, facilitating payments using stablecoins or other digital assets.

License Type: Providing Payment Services Provider (PSP) services.

Payment Services Provider (PSP): Varies depending on the specific payment services and tiers of authorization, ranging from USD 50,000 to USD 200,000 (or KZT equivalent) for higher-tier PSPs.

Must be incorporated or established as a legal entity within the AIFC.

Maintain a physical office presence in the AIFC.

Have key personnel (e.g., CEO, Compliance Officer) primarily based in the AIFC.

Custodian (Digital Assets): Typically USD 300,000 (or KZT equivalent).

License Type: Providing Custodian (Digital Assets) services.

AML/KYC (Anti-Money Laundering / Know Your Customer):

Adherence to AIFC AML Rules, which are aligned with FATF (Financial Action Task Force) recommendations.

Ongoing Capital: Firms must maintain capital sufficient to cover their regulatory capital requirements (base capital plus operational risk requirements) at all times.

Requirement: As a UN member state, Kazakhstan is obligated to implement all UN Security Council resolutions imposing sanctions. These are universally binding.

Compliance: VASPs must screen customers and transactions against the UN Security Council Consolidated List (individuals and entities associated with terrorism and proliferation of weapons of mass destruction, and other sanction programs).

Requirement: While OFAC sanctions are primarily U.S. law, their extra-territorial reach is significant. Any VASP that deals with U.S. persons (citizens, residents, entities), uses U.S. financial systems (e.g., for USD transactions), or handles U.S.-origin technology or services, falls under OFAC's jurisdiction. Given the global nature of crypto, avoiding a U.S. nexus can be challenging.

Compliance: VASPs must screen against OFAC's Specially Designated Nationals And Blocked Persons List (SDN List) and other relevant sanctions lists specific to programs (e.g., Russia/Ukraine, Iran, North Korea).

Requirement: Similar to OFAC, EU sanctions have extra-territorial implications for any entity or individual doing business with EU persons, entities, or utilizing EU financial infrastructure. Many international crypto exchanges and platforms have an EU presence or serve EU customers.

Law of the Republic of Kazakhstan "On Counteracting Legalization (Laundering) of Criminal Proceeds and Financing of Terrorism" (No. 191-IV dated August 28, 2009, as amended): This is the primary AML/CFT law. It designates the Financial Monitoring Agency (FMA) as the competent authority and outlines the obligations of "financial organizations" and other reporting entities (which, under FATF standards, includes VASPs). It requires reporting entities to identify customers, monitor transactions, and report suspicious activities, including those related to terrorism financing and proliferation, which often involves sanctions screening.

Financial Monitoring Agency (FMA): The FMA is Kazakhstan's Financial Intelligence Unit (FIU) and the primary body responsible for enforcing AML/CFT laws, including monitoring compliance with international sanctions.

Secured Digital Asset: A digital asset that certifies property rights to specific goods, services, or property, including money, and is backed by real assets or obligations of the issuer.

Within the AIFC, stablecoins are most likely to be classified as "Asset-Referenced Tokens" or potentially "Security Tokens," depending on their specific design and the rights they convey.

Interaction: The NBK has stated that the Digital Tenge aims to enhance payment efficiency and potentially integrate with innovative financial products. While private stablecoins are not explicitly prohibited, the CBDC will serve as the primary official stable digital currency. The NBK's future regulations may clarify the complementary or competitive roles of private stablecoins relative to the Digital Tenge. It's likely that private stablecoins, if allowed to operate broadly, would be subject to strict oversight to prevent systemic risks and ensure consumer protection, potentially requiring interoperability with the CBDC infrastructure.

General Republic of Kazakhstan: The National Bank of Kazakhstan has historically maintained a cautious stance, stating that cryptocurrencies are not legal tender and are generally viewed as digital property or assets. The use of cryptocurrencies for payments is prohibited outside the AIFC.

General Principle: Gains derived from the sale or exchange of digital assets are generally subject to Individual Income Tax (IIT). When a cryptocurrency is sold for a higher price than its acquisition cost, the difference is considered a capital gain.

General Principle: Profits from the sale or exchange of digital assets are subject to Corporate Income Tax (CIT).

Entity Targeted: Operators and websites of unregistered cryptocurrency exchanges and peer-to-peer trading platforms. Violation Type: Unlicensed financial activity, facilitation of illegal financial operations (e.g., fraud, money laundering), violation of financial regulations. Penalty Amount: Not specified as a direct fine in publicly available reports. Outcome: Blocking of website access, criminal charges against individuals involved, seizure of funds (if traceable).

AFM: Kazakhstan clamps down on illegal crypto mining farms (This link provides context on various AFM actions, including illegal crypto-related activities.)