Kazakhstan to pilot central bank digital currency

The National Bank of the Republic of Kazakhstan has published a public consultation document as part of its plans to develop and pilot a central bank digital currency (CBDC).

National Bank of the Republic of Kazakhstan logo

“The digital tenge will be a legal tender, a measure of value and a store of value,” the bank explains.

“To implement the platform, a two-tier architecture is assumed, in which financial market participants will provide payment services, and the National Bank will provide the infrastructure.”

As part of its CBDC project, the bank will also “conduct a comprehensive study of the benefits and risks with the definition of the tasks solved by the digital currency, the method of its emission and distribution, the technology used, the impact on monetary policy, financial stability and the payment ecosystem”. 

It says it is planning to carry out the study with “financial market participants, the expert community and international partners” before making a decision on the issuance of a digital currency.

“If a decision is made, digital tenge will be issued in the form of a unique digital sequence (tokens) or electronic records stored on special electronic wallets,” the consultation document explains. 

“It will be widely accepted as a legal means of payment and will fulfil all the functions of classic money. 

“All subjects of the economy will have access to the digital tenge.

“Digital tenge can be paid using all traditional payment mechanisms and exchanged with each other like cash. In other words, payment will be available without an internet connection. In addition, digital tenge can also be used for online payments.

“Digital tenge is the digital currency of the central bank. It will not replace cash or non-cash money in Kazakhstan, but will coexist in the payment turnover with them.”

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