Kazakhstan National Bank to Pilot Phased Launch of CBDC

The National Bank of Kazakhstan (NBK), which is the apex bank in the region, has decided to roll out its Central Bank Digital Currency (CBDC), the Digital Tenge.

Much more, Kazakhstan has plans to release its in-house CBDC for commercial usage from 2023 through 2025. This news follows the completion of the second testing phase of the digital tenge.

Specifically, after making the CBDC available next year, there will be a phased expansion of its functions and commercialization until the end of 2025. Therefore, for the next two years, Kazakhstan “will develop solutions for launching into industrial operation,” and will collaborate with other central banks to attempt cross-border transactions as well as currency exchange.

“The unique advantages of the national digital currency relate to conducting a chain of transactions offline,” as outlined in the report.

The pilot phase was filled with offline payments and programmability which led to introducing the digital tenge to certain market participants and crypto industry players. So far, there has been an improvement on the CBDC prototype.

Kazakhstan Boost its Crypto Industry

After a meeting of his team with officials of NBK, Changpeng Zhao, Chief Executive Officer (CEO) of the world’s largest digital asset service provider Binance announced in October that Kazakhstan’s e-tenge will be integrated into BNB Chain, a blockchain built on the crypto exchange. The partnership served as a stage for Binance’s regional expansion and the global drive for crypto adoption.

At the same time, Binance offered the nation a strategy to bridge the gap between traditional banking and the advanced crypto ecosystem. Kazakhstan has dedicated resources to its CBDC research and the main purpose of doing this is to check for potential use cases of the digital tenge which will, in turn, boost financial inclusion.

Also, the Central Asian country was searching for a way to promote competition and innovation in the payment sector. Ultimately, all efforts were geared toward improving Kazakhstan’s global effectiveness. In terms of crypto mining, the Parliament of Kazakhstan recently mentioned that they were developing legislation dubbed “On the Digital Assets of the Republic of Kazakhstan” to guide Bitcoin (BTC) miners in the region. 

This overlooks previous talks by Kassym-Jomart Tokayev, the president of Kazakhstan about the influence of crypto mining. According to the president, crypto mining has no benefit.