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Fintech companies are calling for a closer look at a law that would regulate betting in Kazakhstan.
In a press release, the firms stated that the legislation submitted, which is currently in its last reading, would create a monopoly, the Unified Accounting System. The UAS will be used to identify market participants, process payment, maintain an electronic wallet and settle with clients. It is a major concern that the UAS could charge a commission of up to 1.5% on all transactions in regulated markets where transactions are over KZT1.2tn (US$2.6bn).
Irina Davenenko, a representative of Kazakhstan’s payments industry commented: “The legislation proposed would be a huge step backwards for Kazakhstan. It would harm competition in the vital payments sector, and send a signal to the rest of the world that the necessary reforms are being driven by shadowy interest groups, not what is right for consumers and industries.”
The proposal is based on a prior initiative called the Betting Accounting Centre. The proposal was shelved after a scandal in which a deputy minister was fired for accepting bribes by BAC lobbyists.
Critics are also concerned about the lack of transparency in the UAS ownership and structure as described by the new legislation.
Reintroduction to a UAS was only done in the second reading. The law will be passed by the parliament without a comprehensive impact analysis or scrutiny that is typical of such a significant regulatory change.
Observers claim that the new regulation duplicates regulatory functions currently managed by Kazakh government bodies, and was proposed with the National Bank of Kazakhstan’s cooperation. The central bank had previously created its own reform proposal to avoid introducing a monopolistic institution.
The opponents also claim that the regulation may cause “significant economic damages”. The press release stated that representatives of the National Bank of Kazakhstan and the payments industry had raised alarms but the problems were not adequately addressed.
Fintech and payment companies are concerned about the law. They want it to be re-examined. The fintech and payment companies want the legislation to be re-examined.
Ilya Efimenko is the commercial director at PayDala. He said: “I am appealing to the Senators who need to understand the real purpose behind the UAS’s return in the bill.
“This is a reemergence of the Betting Accounting Center (BAC), a strikingly comparable entity that had been withdrawn previously, and which, according to the deputy of the Amanat Party Elnur Beisenbayev, was the powerful forces from ‘Old Kazakhstan’.
“Before our very eyes, we are witnessing the creation of a monopolist and private operator. The UAS and other monopolies threaten the Fair Kazakhstan principles. “Now, everything is done to destroy the financial system in Kazakhstan, which experts have recognized as being one of the best Central Asian systems.”
