Kazakhstan has made significant progress toward the adoption of a Central Bank Digital Currency (CBDC), joining the group of former Soviet countries foraying into the world of digital fiat currencies.
Telesputnik says that the Central Bank of the Ukraine has submitted a complex plan for a digital version of the tenge to the Supreme Audit Chamber. Despite the fact that the first CBDC trials began in 2021, a full-scale launch had not yet been committed to.
Although it might possibly speed up the process, the Central Bank’s detailed plan is a strong indication of its desire to launch a digital currency. Given the historically tight political relations between the two countries, this development significance occurs on the same day that Russia begins its digital currency experiment. Kazakhstan’s other ally, Belarus, recently revealed plans for its own digital fiat currency.
The Central Bank’s announcement uses the same terminology as its counterparts in Moscow and Minsk. The digital tenge, which the Kazakh Central Bank defined as a third form of payment, would be launched as an additional currency, not as a replacement for conventional or electronic payment methods. The digital tenge, like the digital ruble, is designed to work offline as well, adding flexibility.
In line with previous remarks, the Central Bank’s goal for the CBDC is to improve and modernize payment systems. Their suggested launch plan is for a three-stage deployment with the goal of having the digital money in widespread use by 2025. Russian authorities, in contrast, have made suggestions that their own digital currency would become widely used between 2025 and 2027.
Position of Kazakhstan on Crypto and CBDC Policy
The connection between Kazakhstan and cryptocurrencies has been one of opportunity and difficulties. The nation has become a major participant in cryptocurrency mining, which has resulted in considerable tax payments from miners of almost $7 million in the most recent fiscal year. Notably, the well-known exchange Binance has launched a licensed trading platform in the Central Asian country.
However, bitcoin miners have recently come under fire for their part in the country’s acute power shortages. The government increased power rates for cryptocurrency mining firms this year to address this. The Central Bank Governor had made a hint about looking into a digital tenge last year while attempts were made to create a framework for making decisions in this regard.
Kazakhstan’s resolute move seems to have been sparked by events in Moscow and Minsk. On August 16, Russian banks reported actual transactions using digital rubles, which coincided with Moscow’s continuing attempts to create its digital currency.
The regional landscape of digital currencies is still changing, with some former Soviet countries aggressively embracing this technological transition, while Kazakhstan makes firm progress toward the introduction of the CBDC.