Kazakhstan Is Preparing the Launch of a CBDC Pilot With Private Financial Companies

Central bank digital currencies (CBDCs) are steadily becoming a serious discussion among governments globally, with Kazakhstan as the latest country unveiling its plans. The National Bank of Kazakhstan is making preparations to launch a CBDC pilot program soon.

The National Bank Released a Public Consultation Paper

According to the announcement published on their website, the bank expects to pilot its prototype of a digital tenge within the private companies of the financial industry in the first stage.

The participants will adopt the CBDC to provide payment services via a two-tier architecture where the digital currency will be built.

That said, to guarantee the proper official launch of Kazakhstan’s digital tenge, the National Bank looks forward to conducting “a comprehensive study of the benefits and risks with the definition of the tasks solved by the digital currency, the method of its emission and distribution, the technology used, the impact on monetary policy, financial stability and the payment ecosystem.”

In parallel, the bank also released a 34-page public consultation paper to gather feedback from the locals and assess potential impacts that could bring the virtual asset to the national economy.

However, the National Bank of Kazakhstan didn’t disclose an approximate deadline on when the pilot will be deployed, nor when it could come to an end, implying that it can depend on the evolution of the CBDCs performance among the participants involved.

Kazakhstan’s Stance on Cryptocurrencies

The country has been showing some interest in the crypto industry despite its initial harsh stance in 2018, even suggesting a possible ban on digital asset trading and mining.

To bring relief to the coronavirus-driven economic crisis, the Ministry of Economy proposed in August 2020 a 15% tax for virtual currency mining.

Furthermore, in September 2020, Bagdat Mussin, the Digital Development Minister of Kazakhstan, revealed the government’s plans to achieve a $714 million crypto mining investment goal over the next three years.