Kazakhstan is joining the ranks of former Soviet nations venturing into the world of digital fiat currency. The country is edging closer to the launch of a central bank digital currency (CBDC), according to a proposal presented to the Supreme Audit Chamber by the central bank. Initial tests on the CBDC were conducted in 2021, but the bank was hesitant to commit to a rollout. However, this recent proposal suggests that the release of a digital version of the tenge is likely imminent.
The timing of this announcement is significant, as it coincides with Russia’s pilot of its own digital ruble. Kazakhstan’s neighboring country, Belarus, also unveiled plans to release a digital fiat currency recently. The terminology used by the Kazakh Central Bank is similar to that used by its counterparts in Moscow and Minsk. The digital tenge is intended to serve as a third form of currency and will not replace cash or non-cash payment methods. Like the digital ruble, the digital tenge will also be available offline.
The central bank’s goal for the CBDC is to modernize and develop the payment systems in the country. This aligns with previous statements from the bank, which proposed a three-stage launch for the token. The plan aims to complete the launch of the CBDC by 2025. Similarly, Russian central bank officials have hinted that their digital ruble should be in general use from 2025 to 2027.
In terms of cryptocurrency policy, Kazakhstan has had a mixed stance. The country has established itself as a major player in crypto mining, resulting in miners paying $7 million in taxes last year. Binance, the largest cryptocurrency exchange, has also launched a regulated trading platform in Kazakhstan. However, miners have faced criticism for causing power shortages, leading to increased electricity charges for crypto miners. Despite these mixed fortunes, the Central Bank Governor hinted at tentative plans for a digital version of the tenge last year.
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It appears that the progress made in Moscow and Minsk may have motivated Kazakhstan to fast-track its digital currency plans. Russian banks recently reported successful real-world digital ruble transactions, suggesting that the launch of Russia’s CBDC is imminent. The developments in neighboring countries likely influenced Kazakhstan’s decision to move forward with its own digital currency.
As more countries explore the possibilities of CBDCs and digital currencies, it will be interesting to see how Kazakhstan’s digital tenge shapes its financial landscape. With plans for a three-stage launch, the country is positioning itself to modernize its payment systems and keep up with global digital currency trends. The successful implementation of the digital tenge could potentially bring about significant changes and opportunities in Kazakhstan’s financial sector.
In conclusion, Kazakhstan is on the verge of launching its own CBDC, the digital tenge. The recent proposal presented to the Supreme Audit Chamber indicates that the central bank is committed to releasing a digital version of the fiat currency. This move aligns with the actions of neighboring countries like Russia and Belarus, who have also announced plans for their own digital fiat currencies. Kazakhstan’s digital tenge aims to modernize payment systems and offer offline accessibility, while also coexisting with existing forms of payment. With a three-stage launch plan in motion, the country is setting itself up for a digital future in finance.
