Kazakhstan in TOP 25 for introduction of digital currency

The popularity of the introduction of digital currency is growing in Kazakhstan. Our country is among the TOP 25 countries in terms of the progress of introducing an alternative currency, El.kz reports with reference to the Finprom.kz.

According to the Atlantic Council, 10 countries have already fully launched the digital currency. At the same time, back in April 2022, there were no fully launched digital currencies in the world. In turn, another 15 countries, including Kazakhstan, are studying the introduction of DC in pilot mode. Meanwhile, in 24 countries, the digital currency is under development, in 43 countries – at the research stage.

In the era of universal digitalization around the world, they are increasingly talking about the introduction of a digital currency of central banks CBDC (Central Bank Digital Currency). Already, 105 countries, which account for more than 95 per cent of global GDP, are exploring the possibilities and are at various stages of creating this financial instrument. Such a currency is also called the "third form of money", as it is issued by central banks and complements the usual cash and non-cash funds.

In 2021, the National Bank of Kazakhstan also began to implement the pilot project "Digital Tenge". Within the framework of this pilot project, the viability of the digital tenge concept is being tested. The basic scenarios of the life cycle of this DC have already been implemented - from emission and distribution to purchases, transfers using it and even offline payment.

A key motivation in studying the digital tenge is its potential to improve financial inclusion. The digital tenge should have a positive impact on the development of competition and innovation in the payments industry, as well as increase the competitiveness of the financial sector of the Republic of Kazakhstan in the global market. It is worth noting that the digital tenge is not designed to replace cash or non-cash money, it will be used in parallel.

On July 1, 2022, the National Bank of the Republic of Kazakhstan and the Center for the Development of Payment and Financial Technologies of the National Bank of the Republic of Kazakhstan published the report "Model for decision-making on the introduction of the digital tenge". Based on the results of the study obtained under this model, by the end of 2022 a final decision will be made on the introduction of a central bank digital currency in Kazakhstan. The priority in developing a decision on the launch of the digital tenge will be the final effect for consumers of payment services.

The introduction of the digital tenge will increase the availability of payment and financial services, including through the possibility of payment offline. The digital tenge infrastructure will become an additional tool for financial market participants and government agencies that will create innovative services based on smart contract technology. In the future, the introduction of the digital tenge will increase the efficiency of cross-border payments.