The development of digital assets and tokenization is changing the requirements for financial market infrastructure. Beyond traditional securities safekeeping and settlement, CSD today is expected to expand international connections, work with data, and support new asset types. Yedil Medeu, Chairman of the Management Board of KCSD, explained how the depository's role is evolving and what tasks lie ahead in the coming years.
Q: CSD is traditionally responsible for securities safekeeping and settlement. What changes are expanding its role in the financial market today?
— The financial market is becoming increasingly tech-driven and more integrated with global capital markets. Investors need seamless access to global markets, issuers require instant financial instrument launches, and market participants need integration via APIs. If we remained within the traditional understanding of a depository simply keeping ownership records we would have become a bottleneck for a developing economy. Today, recordkeeping and settlement remain our core, from which we have no right to deviate. But around it, we have built a completely new ecosystem with reliable 'rails' that connect money, data, assets, and global markets.
Q: What is driving the infrastructure to change right now?
— Settlement chains are becoming shorter, speed requirements higher, while markets are simultaneously digitalizing and fragmenting. Geopolitics and compliance risks have shown that access to an asset depends on the resilience of its recordkeeping, safekeeping and settlement route.
At the same time, the technological landscape is changing. Tokenization and DLT are gradually moving from experimentation to practical application. Starting from March 2026, the Eurosystem accepts assets issued in CSDs using DLT as collateral, subject to compliance requirements. Under these conditions, our task is to rapidly adopt new technologies without lowering our standards for reliability and risk control.
Q: How do digital assets change the role of a traditional depository?
— Digital assets alter the form of recordkeeping, but they do not eliminate the need for reliable confirmation of rights and asset safekeeping. Even using blockchain, the market must understand who is responsible for recordkeeping, how authority is distributed, and what happens in case of a technical failure. Therefore, new technologies place additional requirements on infrastructure.
In 2026, we created a new crypto-custody direction. Connection and technical setup with international provider BitGo have been completed, agreement signed, internal documents developed, and a full cycle for the deposit, recordkeeping, and withdrawal of crypto assets established. The target self-custody model implies that private keys are managed directly by KCSD, thereby ensuring technological sovereignty over crypto assets held through KCSD.
The second direction involves registers of digital financial asset holders: receiving digital financial asset issuance data, changing issuance parameters, reconciling with platforms/issuers, and detokenization. In the future, the depository must be able to provide a unified standard of trust for both traditional and digital instruments, without creating two isolated markets.
Q: How do you assess the results of 2025 and the first half of 2026?
— I would evaluate these results primarily through the growth of our activity volumes and client base. Over the past year and a half, the volume of Kazakhstani government securities, equities (excluding government shareholdings), and corporate bonds under depository servicing grew by 45%, reaching $170 billion equivalent. The volume of foreign securities grew by 16%, reaching $12.6 billion. As of July 1, 2026, the number of brokerage accounts in KCSD's system reached 5.6 million, with approximately 3,000 securities issues under depository servicing. In 2025, KCSD's net profit exceeded 2 billion tenge for the first time, with a profitability of around 20%. This allows us to continue investing in new products and infrastructure development. For an infrastructure organization, the main indicator is that despite growing volumes and workloads, system stability and quality of service provided to market participants remain consistently high.
Q: How does KCSD’s digitalization benefit clients, rather than just your IT specialists?
— For clients, digitalization primarily means reduced transaction times and fewer manual actions. For example, processing corporate actions previously took an average of 17 minutes; now it takes less than one second, with 86% of such processes automated. For standard operations, we plan to bring this figure to 100%.
Q: Isn't there a risk that the depository will begin competing with its own clients?
— That risk must be taken into account. KCSD develops services that belong to the infrastructure and are available to all participants on equal terms. Open APIs, directories, corporate action automation, and services for issuers reduce operational costs for banks and brokers, but do not replace their services for end clients. We evaluate the effectiveness of such projects by the reduction in transaction processing times, manual workload, and operational risks for market participants.
Q: KCSD has stated its goal to become a regional depository hub. What lies behind this term?
— By a regional depository hub, we mean an infrastructure through which Kazakhstani and other regional investors gain access to foreign markets, and foreign investors gain access to financial instruments of Kazakhstan and other countries in the region. The fewer intermediaries in this chain, lower the transaction costs, faster the settlements, and clearer the responsibility of each party.
While at the beginning of 2022, KCSD had accounts only in depositories of Europe, Russia, Kyrgyzstan, and Belarus, now we have opened direct accounts with depositories and global banks of America (2023), the Middle East (2026), Turkey (2025), Armenia (2025), Azerbaijan (2025), and Tajikistan (2026).
Our clients receive clear, direct, and predictable routes for their investments and reliable places for their safekeeping.
Speaking of our clients' geography, its diversification should be noted. Looking back to early 2022, our clients comprised only 53 financial institutions, 90% of which were Kazakhstani banks and brokers. Currently, our clients include 128 financial institutions from 11 countries, including the UAE, Cyprus, Hong Kong, Kyrgyzstan, Armenia, Tajikistan, Turkey, and Azerbaijan. Notably, now the share of Kazakhstani banks and brokers in our client structure is only 37.5%, while AIFC participants account for 18.7%. The rest of our clients are non-residents. Thus, over the past four years, our client base has grown by 141%.
Our clients need convenient access to foreign securities, while foreign clients need a clear entry into local securities. In early 2022, we had only 1,316 securities issues under depository servicing, of which foreign securities accounted for 431 issues. Over four years, this number grew by 127% to 2,991 issues, including a 367% increase in foreign securities issues.
Therefore, we are consistently establishing direct links with key foreign markets. The next step, planned for 2026, is Hong Kong and China. The practical benefit of this work lies in reducing the number of intermediaries, time, and costs of operations while maintaining necessary compliance requirements and asset protection.
Q: How do you see KCSD in a few years as a next-generation infrastructure?
— I see KCSD as a reliable infrastructure that helps participants bring new instruments to market faster, work with assets across different jurisdictions, integrate our services into their systems, and access needed data. At the same time, for clients, core processes must remain simple, fast, and predictable.
KCSD's transformation demonstrates how key market infrastructure can stay ahead of the times without losing its fundamental functions—settlement reliability and recordkeeping precision. Today's modern market imposes additional requirements: technological resilience, cybersecurity, data quality, international connectivity, and servicing new types of asset. Developing these areas is a logical continuation of KCSD's role in the financial market and an essential condition for Kazakhstan's financial market to remain competitive, flexible, and prepared for tomorrow's challenges.