The National Bank of Kazakhstan (NBK) has confirmed that it will proceed with the launch of a central bank digital currency (CBDC) in the coming years.
The central bank disclosed rounding up the second testing phase in developing the digital tenge. According to a report published last week, the central bank may adopt a phased approach to launch the CBDC as early as 2023 through 2025.
“Taking into account the need for technological improvements, infrastructure preparation, development of an operating model and a regulatory framework, it is recommended to ensure a phased implementation over three years,” the report read.
In the coming months, the ban “will develop solutions for launching into industrial operation” and explore the possibilities of cross-border usage and currency exchange applications. The bank stated that the primary reason for accelerating research studies into CBDCs stems from the need to provide financial inclusivity and foster healthy competition in the payments industry.
Kazakhstan has already dipped its toes in CBDC waters with an initial pilot focused on offline payments and programmability. The study recommended increased levels of collaboration between key industry players and clarified the use of terms for the country’s regulators.
The CBDC train is rolling at full throttle
The quest to launch CBDCs is picking up significant steam as more countries throw their hats in the ring. New research indicates that nearly 110 countries have begun exploring the potential of a CBDC launch, with a third of the figure mulling over a launch within the next ten years.
The Bahamas, Nigeria, Jamaica, and the Eastern Caribbean have issued CBDCs to varying degrees of success, providing a blueprint to the number of nations looking to float digital versions for their national currencies. China’s digital yuan is perhaps the most widely anticipated CBDC, given the extensive pilots carried out by the People’s Bank of China (PBoC).
While the scramble to launch CBDCs gets scruffier, critics have pointed out the potential risks it may pose for users. Top on the list is privacy concerns, as there is simmering speculation that central banks can use CBDCs as a monitoring tool, while others have raised the alarm over the profitability of commercial banks in the face of widespread use.
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.
Watch: The BSV Global Blockchain Convention presentation, CBDCs and BSV
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