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Kazakhstan prioritises non-cash payment as it works with BIS to launch digital tenge

Kazakhstan has started a public consultation for the launch of a central bank digital currency (CBDC).

June 19, 2021 | Alex Rad
  • Kazakhstan plans to pilot technology for the digital tenge
  • Digital currency initiatives
  • Benefits of the BIS partnerships for Kazakhstan

The Republic of Kazakhstan has revealed plans to launch a central bank digital currency. The National Bank of Kazakhstan (NBK) kick-started the project by releasing the digital tenge report in early May 2021.

Binur Zhalenov, chairman of the board of the payments and fintech research and development centre of NBK, said, "The NBK has started a proof-of-concept that mainly aims to test the basic functionality of the ledger for local retail payments and will serve as a basic infrastructure for a potential digital tenge platform".

Once ready, the digital tenge is expected to be accessed through an open platform controlled by the central bank. Users would be able to use the currency as means of payment, to carry out transactions without the interference of the state just like with the physical tenge, the country’s national currency.

Kazakhstan plans for the digital tenge

The objective for the digital tenge is co-existence with existing forms of money and payment systems. The payment market of Kazakhstan is fragmented with 17 different systems that facilitate national and international transfers.

The digital tenge is expected to provide several benefits. It could advance Kazakhstan’s monitoring of money flows. The country receives significant foreign currency inflows due to its access to natural resources such as oil and gas. "It could make cross-border payments cost-efficient and accessible," said Zhalenov. Besides, Kazakhstan expects the digital currency initiative to provide effective means in the future to manage trade imbalances.

The global competitiveness report 2019 published by the World Economic Forum ranked Kazakhstan 5...

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Keywords:Fiat Currency, Financial Regulation, Digital Payments