Kazakhstan is looking at the possibility of a central bank digital currency (CBDC) but hasn’t decided if a digital tenge is necessary. The central bank of the nation has been working on CBDC infrastructure. According to the governor, whether or not to introduce the digital currency by December 2022 would be determined by then.
Kazakhstan has quickly established itself as one of the world’s major block reward mining centers, coming in second only to the United States. It hasn’t been as forceful with its CBDC, though. The National Bank of Kazakhstan just started looking at the possibility of a CBDC in the middle of this year, announcing intentions to test a digital tenge prototype in May.
Governor Erbolat Dossayev recently announced that the bank had finished a prototype of a digital tenge platform that was started earlier this year. According to local news site Kazinform, Governor Dossayev revealed that the central bank has been working with local financial businesses and a few foreign partners.
CBDCs, according to Dossayev, are expected to play a significant role in the financial sector in the future. However, Kazakhstan does not want to be left behind. Thus it has started pilots or is investigating the potential of a sovereign digital currency.
Some nations whose block reward mining crackdown was a major factor in Kazakhstan being the new center are far behind in their CBDC development. According to recent reports, China’s central bank is now attempting to incorporate the digital yuan into Hong Kong’s Faster Payments System. Tourists from mainland China will use Hong Kong banks and electronic payment systems to spend and replenish their digital yuan wallets.
Kazakhstan recognized the potential relevance of CBDCs in the future. Governor Dossayev said that the central bank has yet to decide on whether or not to issue a digital tenge. He anticipates a judgment by the end of December 2022.