By Michael Scott
The National Bank of Kazakhstan settled for phased implementation of its in-house CBDC to expand its functionality into commercial use by 2025. The country’s central bank confirmed its phased testing of CBDC, indicating digital tenge is viable.
The bank’s recent announcement lauded the conclusion of the second testing phase targeted at assessing CBDC’s potential to enhance financial inclusion. The statement acknowledged the critical positioning of Kazakhstan in becoming a global crypto hub. The update indicated that Kazakhstan ranked third in Bitcoin mining, preceded only by the US and China.
NBK Settles on Phased CBDC Implementation
The revelation of a phased CBDC affirmed the National Bank of Kazakhstan’s (NKB) commitment to extend its global competitiveness within the crypto ecosystem. The report echoes the October 27 announcement by Binance chief executive Changpeng Zhao of plans to integrate Kazakhstan’s digital tenge with BNB Chain. Zhao emphasized that integrating the CBDC with the blockchain would deliver the desired global competitiveness.
The recent NBK paper restated the country’s motivation for studying CBDC viability to assess its input to enhance financial inclusion, nurture competitiveness and integrate innovative payments. As such, the NBK update revealed the pilot study targeted testing its potential to facilitate offline payments.
Three-Year Schedule for CBDC Project
Besides testing the language to use, the central bank tested the digital project programmability and integration of infrastructure participants. The recent report affirmed Kazakhstan’s desire to complete the digital currency project in three years.
The translated report indicated that NBK settled on a phased implementation of CBDC, considering the need to prepare technological infrastructure and develop an operating model. The report pointed out that establishing a relevant framework is mandatory before the in-house CBDC expands into commercial use.
Kazakhstan Influencing Regional Crypto Activity
The NBK report reinforces Kazakhstan’s stance on crypto-related activities where President Kassym-Jomart Tokayev disclosed preparedness for crypto-to-cash conversion during the Digital Bridge 2022 forum. Further, his speech admitted the decision was triggered by the increasing demand for crypto-to-cash conversion by Russians fleeing war-related uncertainties.
President Tokayev’s address on September 28 indicated that proof of CBDC’s relevance and safety would prompt its legal recognition. Such is evident in the recent Kazakhstan approach that matches efforts by neighboring Georgia to introduce crypto-specific regulation in readiness to become a global hub for digital assets.
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