Financial Market - The Times Of Central Asia

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AI Regulation

Kazakhstan Adopts Pragmatic AI Regulation in Financial Sector

As of early 2026, the global financial market faces a strategic choice: impose tighter restrictions on artificial intelligence or allow the technology to evolve within existing regulatory frameworks. While the European Union has opted for comprehensive regulation, Kazakhstan has adopted a more pragmatic approach. According to the National Bank of Kazakhstan, approximately 75% of the country’s banks already use AI technologies— a share that has risen steadily over the past year — and 88% plan to expand their use. This indicates that AI integration is no longer experimental but systemic within the financial sector. Banks are increasingly deploying AI in credit underwriting, fraud detection, and anti-money-laundering transaction screening Madina Abylkasymova, Chair of the Agency for Regulation and Development of the Financial Market, articulated the principle of technological neutrality as early as 2025: the regulator does not intend to introduce artificial constraints until uniform global standards for AI are established. In her view, existing regulatory frameworks remain sufficient. Cybersecurity requirements, data protection standards, and risk management rules continue to apply regardless of whether decisions are made by humans or algorithms. Accountability and oversight remain unchanged. Infrastructure Before Regulation At the same time, the market faces significant structural barriers. These include a shortage of specialists at the intersection of finance and data science, the absence of unified data standards, and the high cost of computing infrastructure. The introduction of additional “European-style” restrictions could disproportionately burden smaller market participants and potentially force them out of the sector. Over the past twelve months, discussions have shifted from pilot experimentation to operational scaling across core banking functions. Some market participants have privately expressed concern that regulatory lag could eventually create supervisory blind spots as AI models grow more complex. Recognizing the high cost of entering the AI ecosystem, the state is assuming an infrastructural role. Timur Suleimenov, Governor of the National Bank of Kazakhstan, operating within the broader digital modernization agenda supported by President Kassym-Jomart Tokayev has outlined a strategic objective: to establish secure and scalable infrastructure to support AI development in the financial sector. This includes the launch of domestic data centers and the expansion of partnerships with global technology companies. The stated goal is to strengthen technological sovereignty and ensure the protection of citizens’ personal data. In practical terms, the regulator aims to create a sovereign “sandbox” in which fintech companies can test algorithms without transferring sensitive information to foreign servers. Supervisory Modernization The rapid expansion of AI also requires a transformation of supervisory practices. Currently, 39% of financial organizations in Kazakhstan use neural networks in some capacity. Over the past year, the number of companies that have progressed from pilot projects to partial implementation has nearly doubled. International institutions, including the Bank for International Settlements and the International Monetary Fund, argue that AI does not generate fundamentally new categories of risk. Rather, it accelerates and amplifies existing risks, credit, market, and operational. This suggests that regulators do not need to rewrite foundational rules but must enhance the speed, scale, and depth of...

Banking

Kyrgyz Bank Launches Loan Self-Limitation to Fight Fraud and Boost Cybersecurity

For the first time in Kyrgyzstan’s financial market, a state-owned bank has introduced a self-limitation service on loans, aiming to strengthen cybersecurity and protect citizens from financial fraud. A New Step Toward Cybersecurity According to the Union of Banks of Kyrgyzstan, Eldik Bank, a state-owned institution, has launched a digital self-limitation service for its clients. The bank believes the mechanism could significantly enhance cybersecurity across the entire banking sector, especially if commercial and other state banks adopt the initiative as well. Earlier, the National Bank of the Kyrgyz Republic (NBKR) had started examining international experiences regarding self-prohibition of online loans and the feasibility of implementing such a practice domestically. The NBKR notes that a self-ban mechanism could not only shield customers from fraud but also encourage more informed decision-making when applying for loans. The Union of Banks of Kyrgyzstan has called on the wider banking community to collaborate on this initiative, advocating for a shared database of clients who have opted to limit their access to new loans. Learning from Regional Experiences In an interview with The Times of Central Asia, Anvar Abdraev, President of the Union of Banks of Kyrgyzstan, explained that the move was motivated largely by a global rise in banking fraud. “Russia and Kazakhstan have already introduced such a service in their banks. Statistics in these countries show that a large number of financially literate people use this service, probably because of the recent increase in bank fraud around the world,” Abdraev said. He added that promoting financial literacy and offering additional protective mechanisms is becoming a crucial component of banking policy across the region. Legislative Efforts Underway The mechanism is currently being actively promoted within Kyrgyzstan’s parliament. A draft bill to formalize the introduction of self-limitation on loans has been submitted for public discussion. “The Union of Banks is also participating in the discussions and is part of the working group drafting the legislation,” Abdraev said. “We aim to create a comprehensive digital platform where, alongside self-limitation, additional customer protection mechanisms would be operational.”

Banking

Kazakhstan’s Central Bank Governor: Navigating the “New Global Map”

Gov. Timur Suleimenov of the National Bank of Kazakhstan spoke about U.S. tariffs, financial uncertainty, reforms and declining oil prices on Wednesday at the spring meetings in Washington of the World Bank Group and the International Monetary Fund. Here are some of Suleimenov’s key comments in a conversation with Jihad Azour, director of the IMF’s Middle East and Central Asia department: Consumer lending and regulation in Kazakhstan: Due to advances in digitizing financial services, Suleimenov said, “consumer lending became easy for the banks because they're all interlinked to the government databases, they have developed their own databases. So checking a consumer, a potential consumer, and deciding whether or not to go ahead with the loan takes minutes. And therefore everyone can go online and in a couple of weeks get, I don't know, $1,000 microcredit or something like that. That led to proliferation of consumer lending. It grew in last five years, it grew at about 30%. Well, nominal wages grew at about 10-12%. So it's not sustainable and that's why we decided that we're doing something. Our part as macroprudential regulator and our colleagues at the Agency for Oversight, they're doing their part in terms of prudential regulation as well.” U.S. Tariffs: “Now, of course, we're in a completely different setup with tariffs, reshaping global economy, supply chains, investment flows. And I think everyone is yet to find their place on this new global map. In terms of trade with the United States, we have $4.2 billion in trade and most of it is in strategic goods when it comes to U.S. imports from Kazakhstan, therefore it is exempted. But the key element is of course oil prices, global economic turmoil, of course the decrease in oil prices for oil-producing countries. Very important, 50% of our exports is oil, 35-33% of our fiscal revenues is oil. So anything that relates to oil production or oil price affects public finances and overall economic performance of the country. But we are ready, we of course as the situation was unfolding, we have our plan B and plan C. I believe many countries do have the same plan and I think we all should. It's very difficult to predict how this thing plays out.” Navigating Uncertainty “Sometimes times of crisis call for very difficult reforms. But all the stakeholders should be on the same page. Sometimes, you know, things like stability are better than development. They prevail. And therefore, it is for the governments and central banks to sit down together and see what the priorities are, the common national interests, national economic interests, whether it's difficult reforms, whether it's just maintaining stability. Well, in Kazakhstan, I think we're ready for more radical reforms that we're currently implementing. But again, let's be honest, being a petroleum state, oil producing state, makes it much, much more difficult. Because when you have 30% of your GDP in coffers in the national fund… it is very difficult to sell the reforms to the public, to the parliaments, because they're saying, guys, you're sitting on cash. The cash is invested normally, elsewhere, not into the local economy, which is the right way,...

Digital Technologies

Binance Officially Launches Operations in Uzbekistan

The National Agency for Prospective Projects has announced that Binance, one of the world’s largest cryptocurrency exchanges, will officially provide services to users in Uzbekistan. According to the agency’s press service, Binance will operate in the country through the local company CoinPay LLC, ensuring compliance with Uzbekistan’s laws. Residents of Uzbekistan will be able to access the platform via coinpay.uz, which will allow users to deposit and withdraw funds in the national currency using bank cards and local payment systems. “The system will launch after integrating all partner platforms, including national payment systems,” the agency stated. Legal Challenges Resolved This development comes after Binance faced regulatory challenges in Uzbekistan. In January 2024, the National Agency for Prospective Projects fined Binance for non-compliance with the country’s laws on cryptocurrency asset turnover. The agency subsequently filed a lawsuit in the Tashkent City Economic Court to enforce the fine. The court trial, which ran from March 26 to June 7, 2024, ruled in favor of the agency. Binance was fined 300 base calculation amounts, which the company paid in full to the state budget. Binance’s Expansion in Central Asia Uzbekistan is the latest addition to Binance’s growing presence in Central Asia. The exchange launched its first local digital asset platform in the region in Kazakhstan in June 2023. This platform is based at the Astana International Financial Center. Later that year, Binance Kazakhstan partnered with the National Bank of Kazakhstan and the National Payment Corporation to implement a groundbreaking project: the issuance of the world’s first stablecoin backed by a national digital currency. This innovation was tested on the BNB Smart Chain (BSC) network. Binance has also made efforts to engage with the cryptocurrency community in Kyrgyzstan. In January 2023, the company held its first community meet-up in the country. In May of that year, Binance’s regional head for Central Asia, Kirill Khomyakov, described Kyrgyzstan as a promising market for cryptocurrency development. However, despite these initiatives, Binance has not yet officially launched operations in the Republic. Binance’s official entry into Uzbekistan marks another step in its strategic expansion across Central Asia. By complying with local regulations and collaborating with a licensed partner, Binance has reinforced its commitment to integrating its platform into Uzbekistan’s growing cryptocurrency landscape.

Finance

Uzbekistan’s Financial Data Now Available on Bloomberg Terminal

Market data from the Uzbek Republican Currency Exchange (UZCE) is now accessible on the Bloomberg Terminal, marking a significant step toward integrating Uzbekistan’s financial market into the global economy. Bloomberg users can now analyze real-time pricing and indicators for Uzbekistan’s currency, money markets, state securities, and derivatives. Expanding Accessibility The UZCE, which includes 35 local commercial banks, six brokerage firms, and one foreign custodian bank, serves as Uzbekistan’s primary platform for liquidity. It offers trading in approximately 20 instruments across various market segments. In 2023, the UZCE reported a total trading volume of $81 billion. By making this data available on Bloomberg, Uzbekistan aims to attract foreign investors by providing them with the tools to understand its financial market and assess trends more effectively. This transparency simplifies risk assessment and enhances decision-making for global market participants. Strengthening Market Confidence Rashid Usmanov, Director General of the Central Bank of Uzbekistan, highlighted the impact of this partnership, stating: “This partnership with Bloomberg will help participants in global markets to get up-to-date and accurate information from the UZCE in different segments of the exchange, thereby more effectively managing their assets. Increasing transparency and openness of data will strengthen market confidence and ensure an increase in liquidity.” The Central Bank of Uzbekistan’s market data is available via Bloomberg’s data license and the “B-PIPE” channel, providing real-time market information. This collaboration enhances the global visibility of Uzbekistan’s financial sector, positioning the country as a more attractive destination for international investment.

Financial Market

Kyrgyzstan Prepares for First Placement of European and American Bonds

According to Bloomberg, the Ministry of Finance of Kyrgyzstan is working on the first placement of European and American bonds in the country's history. Arzubek Jumaev, head of the Kyrgyz Finance Ministry's Public Debt Department, confirmed to the publication that the agency is currently negotiating with investors for a possible first sale of euro and U.S. bonds as early as 2025. “The size of the issue and investment banks will be determined later,” Zhumayev said. It is also reported that the Finance Ministry expects an improvement in its credit rating from Moody's to attract investors. Kyrgyzstan's credit rating is at B3, six indicators below the required investment grade. Earlier, Moody's rating agency changed Kyrgyzstan's credit rating from negative to stable, which, according to the Kyrgyz Ministry of Economy and Commerce, indicates the country's balance of risks and positive dynamics in its financial and economic issues. In addition, in September this year, the authorities signed an agreement with other Western rating agencies, Standard and Poor's and Fitch, to collaborate on assessing credit risks and improving Kyrgyzstan's investment attractiveness. It should be noted that the Ministry of Finance of Kyrgyzstan places government securities guaranteed by the state. These are state treasury bills and state treasury bonds. The securities issues are placed monthly on the Kyrgyz Stock Exchange. In 2024, Kyrgyzstan's domestic debt increased by $232 million, which indicates good demand for government securities. Loans on government securities currently amount to $1.8 billion.