Digital Tenge: NBK’s Latest Updates on Kazakhstan’s CBDC Project | September 2023

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Since 2021, the National Bank of the Republic of Kazakhstan (NBK) has been spearheading the “Digital Tenge” (DT) initiative. After collaborating closely with various stakeholders including financial market entities, expert groups, and international financial institutions, the NBK wrapped up a crucial study in 2022 to assess the necessity of introducing DT. Following the release of the study’s findings, the Kazakhstani government opted for a staggered roll-out spanning three years, concluding at the end of 2025.

As of now, the primary emphasis of the DT initiative has been crafting a retail Central Bank Digital Currency (CBDC) plan. The last few months have seen a plethora of discussions, consultations, and media coverage, fostering an environment for the expanded uptake and application of this pioneering Kazakhstani digital asset. Consequently, the NBK has inaugurated multiple subsidiary projects and strategies, ranging from securing wholesale transactions and pioneering stablecoin ventures to facilitating cross-border and societal payments, expanding upon the prior research conducted on retail CBDC.

This evolution has morphed the DT initiative into a more versatile “general purpose” CBDC narrative rather than merely a retail solution. The burgeoning demand for a multifaceted CBDC furnished the impetus for this shift, blending well with the prior retail CBDC research and presenting a third central bank monetary format to satisfy a diverse user base including consumers, merchants, and financial institutions. The enhanced DT CBDC will form the bedrock for transactions between individuals and banks, encapsulating cross-border dealings.

Their latest paper elucidates the present DT project progression and the anticipated outcomes by the closure of 2023. Current research is examining the potential for universal application, delving into sophisticated use cases to explore innovative theories and wholesale and retail DT concepts. To facilitate this, 2023 will see the launch of two distinct DT platform realms: industrial and experimental (R&D), focused on fostering novel business models to revolutionise the national economy through the DT’s programmable features.

The industrial facet of the DT platform is crafted to establish the principal functions of the DT, transitioning from a pilot phase to full-scale operation in 2023 with two specific approaches to be actualised. Meanwhile, the R&D sphere, a technological playground for trials, will be the testing ground for innovative pilots conceived by the victors of the IDEATHON-2022 competition, along with other schemes proposed by international organisations, stock exchanges, and government bodies, encompassing a variety of facets such as cross-border payments and stablecoin issuance backed by DT.

December 2023 is slated for the release of a comprehensive report encapsulating all acquired data, a critical resource in discerning the ideal architectural compromises essential in forging the ultimate blueprint for the DT framework.

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