The Central Bank of Kazakhstan plans to examine the potential benefits and risks of adopting a state-backed digital currency.
The National Bank of Kazakhstan, or NBRK, on Wednesday released a report on a digital tenge pilot project and opened a public consultation on the possible digital currency of the central bank, or CBDC.
According to the report, the digital tenge would be a new form of money issued by the NBRK to allow “further development of national payment system and reduce dependence on cash settlement using unique technical features”. The bank emphasized that the CBDC is not intended to replace cash or no-cash payments, but would be an alternative used in parallel with existing payment solutions.
The NBRK noted that digital tenge would improve competitiveness in the payments market, strengthen the stability of the financial system and help increase public confidence in state-backed payments. “The technology will meet the highest standards of cybersecurity. […] The bank will pay special attention to consumer protection and the privacy of digital tenge users, “the NBRK said.
First, the bank will conduct a thorough study of the benefits and risks associated with a possible CBDC. In collaboration with financial market players and global partners, the NBRK also plans to define the objectives of digital tenge, issuance and distribution methods, applied technology and the potential impact on monetary policy. , financial stability and the payments ecosystem.
As previously reported, Kazakhstan authorities initially announced that the government began considering a national digital currency in July 2020 along with plans to increase investment in digital currency mining. Later, local officials pointed to the potential of digital tenge to become a crucial tool in the fight against corruption in Kazakhstan.