- Kazakhstan is actively working on the launch of its central bank digital currency (CBDC), called the digital tenge.
- The National Bank of Kazakhstan (NBK) recently published a pilot study focused on offline payments and programmability.
- NBK suggested the inclusion of market participants and infrastructure players, along with the use of more precise language by authorities.
The world’s third-biggest Bitcoin mining hub, Kazakhstan, is actively working on the launch of its central bank digital currency (CBDC), called the digital tenge.
After completing the second phase of the country’s CBDC testing, the National Bank of Kazakhstan (NBK) recently published a pilot study focused on offline payments and programmability. The paper clearly confirmed Kazakhstan’s intention to introduce the digital tenge in 2023.
It is important to note that crypto exchange Binance CEO Changpeng Zhao (CZ) announced in late October that Kazakhstan’s CBDC would be integrated with the exchange’s BNB Chain. The main reason the nation conducted research on CBDC was to see if it could raise financial inclusion, encourage competition and innovation in the payments sector, and boost its international competitiveness.
For various scenarios, the NBK’s research suggested the inclusion of market participants and infrastructure players, along with the use of more precise language by the nation’s authorities.
The report’s recommendation is to ensure a phased adoption over a three-year period, taking into account the requirement for technology advancements, infrastructure preparedness, the establishment of an operating model, and a solid regulatory framework.
The nation’s central bank suggested launching the highly-anticipated digital currency as early as next year. Moreover, it also aims a phased expansion of capabilities and entry into commercial operations until the end of 2025.
The study by Kazakhstan’s central bank comes at a time when many Russians have crossed into the neighboring countries. Kazakhstan announced that it would legalize a system for converting cryptocurrency into cash.
While speaking at the International Forum Digital Bridge 2022, Kazakhstan president Kassym-Jomart Tokayev stated:
“We are ready to go further. If this financial instrument shows its further relevance and security, it will certainly receive full legal recognition.”
In the midst of war-related uncertainty, Kazakhstan has clearly accelerated its CBDC plans. Notably, the move coincides with the neighboring country of Georgia, which has also been planning to introduce new cryptocurrency regulations to mark itself as a major global crypto hub.