Crypto regulation in the world weekly digest #148

Kazakhstan

Kazakhstan is moving to implement a comprehensive regulatory framework for cryptocurrency activities that extends beyond the Astana International Financial Centre (AIFC). This marks a significant shift from the current regime, where most regulated crypto activity is confined to the AIFC, while the huge part of the market operates in a largely unregulated «grey zone».

The National Bank of Kazakhstan is introducing a new licensing regime for crypto exchange providers operating outside the AIFC. This framework will cover platforms that convert digital assets into fiat currency, including those dealing with stablecoins. The National Bank will directly supervise these operators, setting standards for which cryptocurrencies can be traded and ensuring compliance with AML and CFT regulations.

While exchanges based in the AIFC will continue to operate under their existing, specialized regime, the government aims to link the AIFC system with the new national framework. This dual approach is intended to create a unified, transparent, and secure digital asset ecosystem across Kazakhstan. The new regulations are set to be introduced as part of a broader Banking Law reform, with implementation expected in August 2025. The legal amendments will define the status and procedures for digital asset issuance and use, introduce licensing for crypto service providers, and establish criminal and administrative liability for illegal crypto activities.

As of 2023, about 91.5% of crypto transactions in Kazakhstan occurred outside government oversight, resulting in significant capital outflows and money laundering risks. The new framework is designed to bring these activities under regulatory control, protect consumers, and prevent illicit financial flows. By creating a clear and secure legal environment for digital assets, Kazakhstan aims to attract global investors, stimulate local entrepreneurship, and position itself as a regional leader in crypto regulation and innovation.

More about crypto regulation in Central Asia you can read here.

Hong Kong

On May 21, 2025, Hong Kong's Legislative Council passed the Stablecoins Bill, establishing a comprehensive regulatory framework for stablecoins — cryptocurrencies whose value is tied to external assets such as fiat currencies or commodities.

From now, any entity issuing a fiat-referenced stablecoin in Hong Kong, or issuing an FRS pegged to the Hong Kong dollar (regardless of location), must obtain a license from the Hong Kong Monetary Authority (HKMA). Only licensed issuers may offer stablecoins to retail investors or advertise such products to the public.

Licensed issuers are required to:

• Segregate client assets from their own.

• Maintain a robust and transparent stabilization mechanism.

• Guarantee redemption of stablecoins at par value under reasonable conditions.

• Meet strict requirements for reserve asset management, risk management, disclosure, and auditing.

• Comply AML/CFT obligations.

The HKMA is empowered to issue, suspend, or revoke licenses, conduct investigations, appoint statutory managers, and impose sanctions for non-compliance. Only advertisements for licensed stablecoins are permitted, and the public is advised to be cautious of unlicensed offering.

The Bill covers stablecoins used as a medium of exchange, unit of account, or store of value, but excludes central bank digital currencies and certain other regulated digital tokens. The new law is also expected to enhance market integrity, consumer protection, and financial stability. It also aims to foster innovation and attract global stablecoin issuers to Hong Kong's regulated environment.

The Stablecoins Ordinance is anticipated to take effect later in 2025, with a transition period for industry participants to comply. The HKMA will conduct further consultations on the detailed regulatory requirements in the coming months.

UAE

Dubai's Virtual Assets Regulatory Authority (VARA) updated its rules on May 19, 2025, to provide a clear legal framework for the issuance and secondary market trading of real-world asset (RWA) tokens, officially termed Asset-Referenced Virtual Assets (ARVA) tokens.

The new rules make issuing and listing RWA tokens on secondary markets a regulatory reality in Dubai and the broader UAE, moving beyond theoretical discussions. These tokens represent direct or indirect ownership of real-world assets, entitle holders to income or value derived from such assets, and are backed, collateralized, or derivative forms of these assets.

Issuers must obtain a Category 1 Virtual Asset Issuance license, produce a comprehensive white paper and risk disclosure statement, and maintain a paid-up capital of at least 1.5 million AED (about $408,000) or 2% of reserve assets. Issuers are also a subject to monthly independent audits and continuous supervisory oversight to ensure transparency and compliance.

Regulated exchanges and broker-dealers in Dubai are now authorized to distribute, list, and trade ARVA tokens, addressing previous regulatory gaps seen in other jurisdictions where secondary trading was unclear or unregulated.

The framework is designed to overcome past failures of security token offerings (STOs) by providing regulatory certainty, viable secondary market infrastructure, and fostering institutional investor participation. Market participants must comply with the new rules by June 19, 2025.

News from other countries:

• In Russia, new legislation proposes significant fines and penalties for using cryptocurrencies as a means of payment. According to a draft law jointly prepared by the Central Bank of Russia and the Ministry of Finance and submitted to the State Duma, individuals who pay with cryptocurrencies could face fines ranging from 100,000 to 200,000 rubles, while companies could be fined between 700,000 and 1 million rubles (over $12,000).

• South Korea is set to lift its long-standing ban on institutional cryptocurrency trading and investment in 2025, marking a significant shift in its crypto regulatory landscape. The Financial Services Commission (FSC) announced plans for a phased rollout to allow institutional participation in crypto markets. The first phase, starting in early 2025, permits non-profit organizations such as charities, universities, and law enforcement agencies to trade and sell virtual assets. We continue to highlight the news of the world of crypto regulation worldwide. Please stay with us!