Foreign Banks, Transit Potential, and Cryptocurrency

@kazeconomy has compiled the most critical challenges facing our nation, which will define our future living and economic environment.

The regulatory authority has prepared a draft law aimed at liberalizing the requirements for establishing foreign subsidiary banks. According to the Deputy Head of the AFRFR financial institutions from Eastern Europe, the Middle East, and Asia have shown interest in Kazakhstan. 

Recall that last year President Kassym-Jomart Tokayev in his September address to the people of Kazakhstan emphasized the need to attract three reputable foreign banks to enhance competition within the sector. The essence of the liberalization is to reduce the documentation typically required for opening subsidiary banks. However the regulator intends to maintain stringent criteria concerning financial stability and business reputation. Augmenting the number of players in the financial sector remains a paramount challenge to elevate competition and service quality and to reboot corporate lending, as also addressed by the president.

Transit freight transportation through Kazakhstan's territory increased by 21% showing positive dynamics across all directions. Primary efforts were concentrated on completing construction projects such as Karaganda-Almaty, Taldykorgan-Ust-Kamenogorsk, and Atyrau-Astrakhan, subsequently opening traffic on these segments. 

A total of 2.9 thousand kilometers of roads underwent capital and medium repair with 1.1 thousand kilometers completed (200 km of capital repair and 900 km of medium repair). On the local network 4.2 thousand kilometers were addressed, with 3.6 thousand kilometers completed, elevating the proportion of roads in normative condition to 87% within both the republican and local networks. The primary objective now is to transform Kazakhstan into an international transit hub within the development of the Trans-Caspian International Transport Route, leveraging the nation's unique geographical position and diversifying the economy.

Since 2017 global investments in the crypto sphere reached $90 billion with over 50 transactions conducted in February 2024 alone. The majority of investments were channeled into DeFi, NFT, gaming, and web3 projects, with active participation from entities like Animoca Brands, Polychain Capital, Framework Ventures, and Shima Capital. As of early 2024, Kazakhstan retains 3.5% of the global Bitcoin hash rate, trailing behind the USA, China, and Russia. 

In Kazakhstan, crypto exchanges operate solely within the Astana International Financial Center's platform. The "Law on Digital Assets in the Republic of Kazakhstan" enacted early last year delineates the regulatory framework and operational conditions for exchanges and mining. The advancement of the crypto industry stands as a significant challenge for diversifying our economy.