<![CDATA[FINTECHKAZAKHSTAN.COM - News & Insights]]>Sun, 19 May 2024 16:55:39 +0000Weebly<![CDATA[‘Digital Money Regulation Series’: An EU, UK and Central Asian Comparative Perspective 2]]>Tue, 28 Feb 2023 09:40:02 GMThttp://fintechkazakhstan.com/news--insights/digital-money-regulation-series-an-eu-uk-and-central-asian-comparative-perspective-2
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Peter Oakes Slides on Central Bank Digital Currencies here.

#CBDCs: What are they Good For?

That's the title of my topic tomorrow in London tomorrow (28th February 2023). Hopefully you are joining us in London? If not, contact Paresh Kathrani (link below) to receive details of the 3rd event in the series in a few months. Cannot guarantee at this late hour Paresh will be able to take anymore bookings. But regardless, he is nice bloke & very well informed on these topics.

The abstract for my contribution is "Central Banks are investigating the issuing of a digital complement to cash known as a Central Bank Digital Currencies (CBDC). CBDCs have the potential to be reliable means of digital payment and remittance in the face of reported decline in the use of cash but what are the positives and negatives of countries embarking on the issuing of CBDCs. Further, simply because central banks CAN issue CDBDCs, does that mean that they SHOULD?"

Great to be in London again. A global epic centre of fintech & digital assets. The more so following the release by the Bank of England paper on its proposed Digital Pound a few weeks ago. Of course being in the United Kingdom today coincides with (hopefully for all the right reasons) an historic day for the UK & the EU reaching an implementation agreement via the Windsor Framework on the Northern Ireland Protocol.

We are running our 2nd event in our series examining ‘ Digital Money Regulation’ in Central Asia, the EU, and UK’, at Grays Inn on Tuesday 28th February 2023.

Our expert speakers include Ainur Akhmetova (Managing Partner and CEO of AKHMETOVA Law Firm Limited), Flavia Kenyon (The 36 Group), Michael Patchett-Joyce FCIArb (The 36 Group) & Peter Oakes (Armstrong Teasdale). Following the presentations, we will be moderated by the affable Dr Paresh Kathrani. And none of this would have happened without the great work and support of everyone involved such as Rashid Gaissin, Paulius Pakutinskas, Dr. Satya Talwar Mouland & Paul Schwartfeger.

The event is convened by Armstrong Teasdale, the The 36 Group, the British Kazakh Law Association & Mykolas Romeris University Law School.

We will continue looking at #blockchain in addition to #CBDCs and how value fluctuates.
 
The diverse risks landscape will be looked at, including AML/CFT, cybercrime, privacy, the need for licensing and registration (digital assets), & how jurisdictions across the world are regulating new forms of money, plus looking to take advantage of distributed ledger technology themselves - did I forget to say smartcontracts?

Case studies will be considered & the Bank of England consultation on the digital pound will be examined, as too will recent comments by the European Central Bank on its plans for a DigitalEuro.

We'll also be looking at the new Law on Digital Assets in Kazakhstan.

A white paper will be released in summer 2023.

FINTECH UK Fintech Ireland Fintech Kazakhstan Fintech Cyprus FintechLithuania.com Official (Fintech Lithuania)

Peter Oakes Slides on Central Bank Digital Currencies here.
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]]><![CDATA[Agreement Reached on European Crypto-Assets Regulation (MiCA)]]>Fri, 01 Jul 2022 00:00:00 GMThttp://fintechkazakhstan.com/news--insights/agreement-reached-on-european-crypto-assets-regulation-mica
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By Peter Oakes, Founder 
Don't forget to subscribe to our Newsletter and visit our Crypto & Digital Asset page for information.
 
Background:
  • MiCA is part of the larger digital finance package, which contains a digital finance strategy, a Digital Operational Resilience Act (DORA) – that will cover CASPs - and a proposal on distributed ledger technology (DLT) pilot regime for wholesale uses.
  • MiCA is intended to bridge a gap in existing EU legislation:
    • ensuring that the current legal framework does not pose obstacles to the use of new digital financial instruments.
    • ensuring that such new technologies and products fall within the scope of financial regulation and operational risk management arrangements of firms active in the EU.
    • ensuring the supporting of innovation and uptake of new financial technologies.
    • providing an appropriate level of consumer and investor protection.

Timeline:
  • 24 September 2020: European Commission came forward with the MiCA proposal
  • 24 November 2021: The Council adopted its negotiating mandate on MiCA
  • 31 March 2022: Trilogues between the co-legislators commenced
  • 30 June 2022: Provisional agreement reached.
  • Next Steps: The Provisional agreement must now be approved first by the Economic and Monetary Affairs Committee  followed by a plenary vote of the European Union Parliament and the Council of the European Union Council also has to approve the deal, before the MiCA Regulation can come into force.
  • Early 2024: It is expected that MiCA should be implemented by early 2024.
 
What:
  • The EU brings crypto-assets, crypto-assets issuers and crypto-asset service providers to come under a single EU regulatory framework for the first time.
  • On Thursday, 30 June 2022, the Economic and Monetary Affairs Committee negotiators for the European Parliament struck a provisional political agreement with the European Union Council on new rules on crypto-assets. 
Scope:
  • issuers of unbacked crypto-assets (this means that Central Bank Digital Currencies are not in scope),
  • stablecoins
  • trading venues where crypto-assets are held
  • wallets where crypto-assets are held.
  • non-fungible tokens (NFTs) i. e. digital assets representing real objects like art, music and videos, are excluded from MiCA except if they fall under existing crypto-asset categories.
Why:
  • Regulatory Framework: MiCA designed to protect investors and preserve financial stability.
  • Legal Certainty: Pan-EU wide definitions, legal provisions and authorisation standards not only serve the Regulatory Framework, but provide enhanced legal certainty for issuers, holders, users, regulators and government agencies.
  • Innovation: MiCA designed to provide for innovation and fostering attractiveness of the EU crypto-asset sector.
  • Uniformity: MiCA designed to bring more clarity (and hopefully remove any possible regulatory arbitrage going forward) and uniformity of approach to crypto assets in the EU.  Particularly important as some member states have national legislation for crypto-assets but without a specific regulatory framework at EU level, the EU risk fragmentation and arbitrage.
  • Consumer & Investor Protection: An urgent need for an EU-wide regulation has arisen because of recent developments (such as the crypto-crash / ‘crypto winter’).  MiCA aims to better protect Europeans who have invested in crypto-assets and prevent their misuse. Like all regulations, MiCA will protect consumers against some, but not all, of the risks associated with investing and help them avoid fraudulent schemes.
  • Reputation: MiCA aims at putting to an end to the crypto wild west.
  • Standard Setting: MiCA will confirm the EU’s role as a standard-setter for digital asset innovation in a pan-EU regulatory environment.

Consumer Protection:
  • Currently, consumers have very limited rights to protection or redress, especially if the transactions take place outside the EU. With the new rules, crypto-asset service providers will have to respect strong requirements to protect consumers wallets and become liable in case they lose investors’ crypto-assets. MiCA will also cover any type of market abuse related to any type of transaction or service, notably for market manipulation and insider dealing.

ESG:
  • Actors in the crypto-assets market will be required to declare information on their environmental and climate footprint. The European Securities and Markets Authority (ESMA) will develop draft regulatory technical standards on the content, methodologies and presentation of information related to principal adverse environmental and climate-related impact. Within two years, the European Commission will have to provide a report on the environmental impact of crypto-assets and the introduction of mandatory minimum sustainability standards for consensus mechanisms, including the proof-of-work.

Financial Crime:
  • Crypto-assets will be covered by EU updated anti-money laundering (AML), legislation.  MiCA will not duplicate the anti-money laundering provisions as set out in the newly updated transfer of funds rules agreed on 29 June 2022. 
  • This means that the ‘travel rule’.i.e. the rules on information accompanying the transfers of funds will be extended to transfers of crypto assets.  The EU is adamant about meeting the international standards on the exchange of crypto-assets, in particular recommendations 15 and 16 of the Financial Action Task Force (FATF), the global money laundering and terrorist financing watchdog.  Read the FATF’s release on 29 June 2022 ‘Targeted Update on Implementation of FATF’s Standards on VAs and VASPs.’ For further information.
  • The European Banking Authority (EBA) will be tasked with maintaining a public register of non-compliant crypto-asset service providers.
  • Crypto-asset service providers (CASPs), whose parent company is located in countries listed on the EU list of third countries considered at high risk for anti-money laundering activities, as well as on the EU list of non-cooperative jurisdictions for tax purposes, will be required to implement enhanced checks in line with the EU AML framework.
  • Tougher requirements may also be applied to shareholders and to the management of the CASPs), notably with regard to their localisation.

StableCoins:
  • A strong regulatory framework will apply to stablecoins to protect consumers.  The EU feels that this should be self-evident given the recent crystallising of risks incurred by holders in the absence of regulation, as well as the contagion impact stablecoins have on other crypto-assets.
  • Stablecoins issuers must:
  1. build up a sufficiently liquid reserve
  2. apply a 1/1 ratio and partly in the form of deposits. 
  3. provide every “stablecoin” holder with a claim at any time and free of charge by the issuer
  4. ensure that the rules governing the operation of the reserve provides provide for an adequate minimum liquidity.
  • Stablecoins will be supervised by the EBA, with a presence of the issuer in the EU being a precondition for any issuance.

Asset-Referenced Tokens:
  • Asset-referenced tokens (ARTs) based on a non-European currency used as a means of payment will be constrained to preserve the EU’s monetary sovereignty. Issuers of ARTs will need to have a registered office in the EU to ensure the proper supervision and monitoring of offers to the public of asset-referenced tokens.

Non-Fungible Tokens:
  • Non-fungible tokens (NFTs), i. e. digital assets representing real objects like art, music and videos, are excluded from the scope except if they fall under existing crypto-asset categories. Within 18 months the European Commission will be tasked to prepare a comprehensive assessment and, if deemed necessary, a specific, proportionate and horizontal legislative proposal to create a regime for NFTs and address the emerging risks of such new market.

Regulatory Framework:
  • CASPs will require an authorisation to operate within the EU.
  • Regulators (i.e. national authorities) required to issue authorisations within three months.
  • Regarding the largest CASPs, national authorities will transmit relevant information regularly to the European Securities and Markets Authority (ESMA).

Next steps:
  • The Provisional agreement must now be approved first by the Economic and Monetary Affairs Committee  followed by a plenary vote of the European Union Parliament and the Council of the European Union Council also has to approve the deal, before the MiCA Regulation can come into force. See more here.
  • It is expected that MiCA should be implemented by early 2024.

Further reading:
]]><![CDATA[STATISTA DATA ON FINTECH IN KAZAKHSTAN]]>Thu, 30 Jun 2022 00:00:00 GMThttp://fintechkazakhstan.com/news--insights/statista-data-on-fintech-in-kazakhstan
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FinTech is short for ‘Financial Technology’, the central concept of structural change and digitization within the financial services industry. Under the collective name FinTech (which still lacks a clear definition even within the industry), financial services are understood within the framework of the Digital Market Outlook; digital infrastructures allowing the establishment of new types of agreements and procedures in the classic areas of banking such as lending, investment strategies and payments.

Kazakhstan Highlights:
  • The market's largest segment will be Digital Payments with a total transaction value of US$3,822.00m in 2022.
  • The average transaction value per user in the Alternative Lending segment is projected to amount to US$20.98k in 2022.
  • The Digital Investment segment is expected to show a revenue growth of 36.5% in 2023.
  • In the Digital Payments segment, the number of users is expected to amount to 9.01m users by 2026.
  • Total Transaction Value in the Digital Payments segment is projected to US$3,822.00m in 2022.
  • Due to the major differences in the KPIs of FinTech products, e.g. different nature of loan origination volume in Alternative Lending in comparison to Assets under Management in Robo-Advisors, no total transaction value for all segments can be calculated.

Source: https://www.statista.com/outlook/dmo/fintech/kazakhstan
Please note the information here is the copyright of Statista.  A summary is reproduced here for the purposes of fair comment and education.  Please check the source data.
]]><![CDATA[Kazakhstan’s investment regime in new global geopolitical conditions discussed in London]]>Sun, 01 May 2022 12:39:14 GMThttp://fintechkazakhstan.com/news--insights/kazakhstans-investment-regime-in-new-global-geopolitical-conditions-discussed-in-london
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The Embassy of Kazakhstan in the UK and Armstrong Teasdale law firm co-hosted a conference for investors titled "Kazakhstan’s Investment Regime: Navigating Change and Identifying Opportunities".

Ambassador of Kazakhstan Erlan Idrissov and Partner of Armstrong Teasdale Daniel O’Connell delivered welcoming speeches at the conference.  AIFC Chief Investment Officer James Martin spoke about the new investment prospects in Kazakhstan after the January events and in light of the ongoing conflict in Ukraine
The conference was moderated by the founder of Fintech Ireland and Fintech UK and Consultant at Armstrong Teasdale Peter Oakes.

Conference speakers included Aida Sitdikova, Director for Energy and Natural Resources in Eurasia at the European Bank for Reconstruction and Development, Aiman Mukanova, Executive Director and Head of Central Asia of MUFG Bank, Rashid Gaissin, Partner of Armstrong Teasdale, and Assel Suankulova, Deputy Director of the Investment Promotion and Marketing Department of Kazakh Invest.

Following the conference a reception was hosted at the building where Armstrong Teasdale will be located from later this month - 38-43 Lincoln's Inn Fields, London WC2A 3PE, United Kingdom.  

Read more here: https://www.inform.kz/en/kazakhstan-s-investment-regime-in-new-global-geopolitical-conditions-discussed-in-london_a3927915

Armstrong Teasdale Linkedin Post here

At the event, attendees heard from: 
  • Keynote: Ambassador of Kazakhstan to the United Kingdom and Ireland, H.E. Erlan Idrissov
  • Speaker: James Martin, Chief Investment officer, AIFC
  • Panelist: Assel Suankulova, JSC Deputy Director, Kazakh Invest National Company
  • Panelist: Aida Sitdikova, Director and Head of Energy Eurasia, Sustainable Infrastructure Group, EBRD
  • Panelist: Rashid Gaissin, Partner, Armstrong Teasdale
  • Panelist: Aiman Mukanova, Executive Director and Head of Central Asia, MUFG Bank
  • Moderator: Peter Oakes, Armstrong Teasdale, Fintech Irealand and Fintech UK
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]]><![CDATA[AIFC Tech Hub Enjoys Positive Results of First Fintech Accelerator for Kazakhstan’s Banks]]>Thu, 07 Apr 2022 00:00:00 GMThttp://fintechkazakhstan.com/news--insights/aifc-tech-hub-enjoys-positive-results-of-first-fintech-accelerator-for-kazakhstans-banks
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The Tech Hub of the Astana International Financial Center (AIFC) plans to launch new programs and invites financial corporations to cooperate after the successful launch of the first fintech accelerator for banks, reported the hub’s press service.

As an AIFC subdivision, Tech Hub promotes start-up ecosystem, venture industry market, e-commerce, corporate innovation and new technology in Kazakhstan. The hub also launches support programs for market players, promotes structuring of venture deals and the testing of new fintech solutions.

Read more here


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