Kazakhstan Progresses Towards Launching Digital Tenge CBDC Amid Crypto Developments
Kazakhstan, now recognized as the world’s third-largest Bitcoin (BTC) mining hub after the United States and China, is moving forward with plans to launch its in-house central bank digital currency (CBDC), the digital tenge. This development comes after the National Bank of Kazakhstan (NBK) completed the second phase of testing for the digital currency.
In late October, during an event, Binance CEO Changpeng “CZ” Zhao officially announced that Kazakhstan’s CBDC would be integrated with BNB Chain, the blockchain platform developed by Binance. The country’s primary goal behind investigating the viability of launching a CBDC is to enhance financial inclusion, stimulate competition and innovation within the payments industry, and bolster Kazakhstan’s global competitiveness.
The pilot research focused on offline payments and programmability, suggesting the involvement of market participants and infrastructure players for various scenarios. The research also proposed to clarify the language used by the country’s regulators in relation to the CBDC. In a report, it was mentioned:
“Taking into account the need for technological improvements, infrastructure preparation, development of an operating model and a regulatory framework, it is recommended to ensure a phased implementation over three years.”
The NBK indicated that it aims to make the digital tenge available as early as 2023, with a phased rollout that expands its functionality and moves into commercial operation by the end of 2025.
Legal Mechanisms for Cryptocurrency Conversion
With many Russians seeking refuge across the border amid ongoing geopolitical uncertainties, Kazakhstan is also taking steps to legalize mechanisms for converting cryptocurrencies to cash. President Kassym-Jomart Tokayev expressed his confidence in the potential of crypto as a financial instrument, stating:
“We are ready to go further. If this financial instrument shows its further relevance and security, it will certainly receive full legal recognition.”
In parallel to Kazakhstan’s moves, its neighboring country, Georgia, is also introducing new crypto regulations in an effort to become a global crypto hub. This reflects a broader trend of acceptance and regulatory adjustment in response to the burgeoning cryptocurrency industry across various nations.
