The Kazakhstan government has recently set up a public consultation service for the potential digital currency that will be created and used in the State. In a report on May 5, the National Bank of Kazakhstan revealed that it is at the stage of prototyping the highly anticipated CBDC. The CBDC in Kazakhstan will be called the digital tenge.
The State also made it clear that it has no intentions at the moment to totally scrap the regular fiat being used or to even replace other digital payment systems. However, the digital token will serve as a complement to these existing systems.
The digital tenge aims at developing the payment systems available in the country. It will also serve as an alternative payment system and help reduce excessive reliance on other existing payment systems.
The Role of the Digital Tenge
According to the NBRK, the new digital currency will make the payment market more competitive and will help to bring stability to the country’s finance system. The nation also intends that the new technology is completely secure and poses no risk to adopters of the blockchain-based payment method.
The digital tenge will be regulated and the banks will ensure that consumers are protected and users are granted the needed privacy in the use of this currency.
Before the digital tenge is launched, however, the banks will carry out detailed and comprehensive research to examine the potential benefits of this innovation, as well as the downsides. Should loopholes be found, they will be fixed before the launching of the CBDC.
The NBRK will also work hand in hand with the existing financial market players to define specifics of the digital currency, specifics such as the method of issuance and the mode of distribution of the currency. The impact of the currency on the financial ecosystem will also be examined.
Should the research go well and the testing of the impacts of the currency is concluded effectively, the government will then go ahead to approve its launching and use. The Kazakhstan government has been considering a digital currency since July last year and has also been making plans to improve its investment in cryptocurrency mining.