Fintech and payment companies in Kazakhstan are expressing concern over a proposed gambling regulation law that would create a new monopoly structure, the Unified Accounting System (UAS).
The bill, which is at the final stage of consideration, envisages the establishment of a UAS that will manage market participants, process payments, maintain a single electronic wallet and carry out settlements with clients. UAS also plans to charge a fee of up to 1.5% on all regulated market transactions exceeding KZT 1.2 trillion ($2.6 billion) annually.
This is reminiscent of the case of the previously reviewed Betting Accountability Center (BAC), which was withdrawn in 2021 following a corruption scandal involving a deputy minister. Critics point to a lack of transparency in the structure and ownership of the Unified Accounting System.
This system was introduced at the second reading of the law, bypassing the comprehensive impact analysis. Critics argue that this approach has prevented adequate examination of the potential economic and regulatory implications.
The National Bank of Kazakhstan, the country’s central bank, opposes the introduction of UAS, pointing out that it would duplicate existing regulatory functions without improving transaction security or consumer protection. The central bank has developed its own reform proposal, which does not involve the creation of a monopoly enterprise.
The Kazakhstan payments industry also presented an alternative reform plan, which was ignored. Industry representatives warn that the proposed legislation could negatively impact the payments sector, reduce competition and have a negative impact on the business environment in Kazakhstan.
A representative from the Kazakhstan’s payments industry said: “The proposed legislation would be a step backwards for Kazakhstan, harming competition in the country’s vital payments sector and signaling to the outside world that necessary business reform is being driven by shadowy interests, rather than what’s right for industries and consumers”.
In the context of current legislative debates taking place in Kazakhstan, the country is actively promoting efforts to regulate and control online gambling. Blocking access to LinkedIn in 2021 due to online casino advertising reflects the government’s strict stance on gambling.
During these discussions, fintech and payment stakeholders are pushing for a balanced and transparent approach to regulation. This is aimed at ensuring market stability and protecting consumer interests.
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