Key Takeaways
- National Payment Corporation will look into interbank clearing services, money transfers and digital identification.
- Launch deadline for digital tenge is 2025
Kazakhstan’s National Bank (NBK) has taken a significant step towards embracing the digital economy by creating a dedicated entity responsible for leading the development and rollout of its central bank digital currency (CBDC), known as the digital tenge.
The newly formed National Payment Corporation (NPC) is a reorganization of the Kazakhstan Center for Interbank Settlements and is tasked with overseeing the national payment system. This includes crucial functions such as interbank clearing services, money transfers, and digital identification. However, its primary role revolves around developing a robust “digital financial infrastructure,” with a primary focus on bringing the digital tenge to life.
The journey towards the digital tenge began in February 2023, with a target launch date set for 2025. Initially, NBK’s Deputy Governor, Berik Sholpankupov, outlined a vision centered on a harmonious “collaboration between traditional finance and DeFi,” aimed at significantly enhancing financial inclusion and bolstering international trade.
At present, the CBDC pilot in Kazakhstan has progressed to a controlled environment pilot phase involving real consumers and merchants. Notably, one of the pivotal partners in this endeavor is Binance, the world’s largest cryptocurrency exchange. Binance is actively supporting the pilot through its technical solution, BNB Chain, signifying a noteworthy convergence between traditional financial institutions and the blockchain-based cryptocurrency industry.
In an effort to further solidify its presence in Kazakhstan’s digital asset landscape, Binance launched a regulated digital asset platform in the country in partnership with local Freedom Finance Bank. This development enables users to seamlessly transfer fiat funds to their accounts on the platform, marking a significant stride towards mainstream integration of cryptocurrency.
Kazakhstan’s proactive stance towards cryptocurrency is also evident in its taxation policies. In 2022, the government collected approximately $7 million in tax payments from cryptocurrency mining entities following the implementation of revised regulations governing the fiscal responsibilities of cryptocurrency mining.
Additionally, the government introduced legislation aimed at curbing excessive energy consumption by domestic crypto miners, instituting licensing requirements, and making minor adjustments to the taxation framework.
Kazakhstan’s pursuit of CBDCs aligns with a global trend, as numerous countries worldwide explore the potential of CBDCs. An astounding 105 countries, representing a substantial 95% of the global gross domestic product, are currently exploring the concept, highlighting the collective recognition of the transformative potential of digital currencies in shaping the future of finance.
