Kazakhstan is exploring the feasibility of a central bank digital currency (CBDC), but it has yet to decide on the need for a digital tenge. The country’s central bank has been developing CBDC infrastructure. However, according to the governor, it will determine whether to launch the digital currency by December 2022.
Kazakhstan has burst onto the scene as one of the world’s largest block reward mining hubs, ranking only behind the first-placed United States. However, it hasn’t been as aggressive with its CBDC. The National Bank of Kazakhstan only began exploring the feasibility of a CBDC mid this year, announcing plans to pilot its prototype of a digital tenge in May.
Governor Erbolat Dossayev recently revealed that the bank has been working on developing a prototype of a digital tenge platform this year, and it has finally completed it. As local outlet Kazinform reports, Governor Dossayev announced that the central bank has been working with local financial firms and select international partners on the project.
Dossayev acknowledged that CBDCs are likely to play a key role in the financial industry in the future. Most countries have either launched pilots or are exploring the viability of a sovereign digital currency, and Kazakhstan doesn’t want to lag behind.
Some countries like China, whose block reward mining crackdown played a key role in making Kazakhstan the new hub, are at advanced stages in their CBDC development. As recently reported, China’s central bank is now working to integrate the digital yuan into Hong Kong’s Faster Payments System. This will allow visitors from mainland China to spend and recharge their digital yuan wallets through Hong Kong banks and electronic payment systems.
While Kazakhstan recognizes the role that CBDCs could play in the future, Governor Dossayev revealed that the central bank has yet to decide whether to launch a digital tenge. He expects the decision to be made before December 2022.
To learn more about central bank digital currencies and some of the design decisions that need to be considered when creating and launching it, read nChain’s CBDC playbook.
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