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Kazakhstan should have its in-house CBDC ready and available for commercial use as early as 2023.
Kazakhstan has revealed plans to officially roll out its central bank digital currency (CBDC), the digital tenge, over the next three years. This follows after the National Bank of Kazakhstan (NBK) completed the second phase of testing for its digital currency.
Kazakhstan is currently the world’s third-largest Bitcoin (BTC) mining location. That is after the US and China, in that exact order. During the just-concluded testing phase, the country set out to determine the potential benefits of launching its CBDC. These include how it can bolster financial inclusion as well as bring the nation to a state of global competitiveness, especially as it concerns payments.
From its research, however, Kazakhstan has now determined that the best course of action would be to roll out its digital tenge in a phased manner. Part of the report reads:
“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.”
Meanwhile, the ideas that Kazakhstan had of the upcoming digital tenge, appear to have been validated during its studies. At least, according to study reports contained in a whitepaper released by the country’s central bank.
Per NBK’s recommendation, Kazakhstan should have its in-house CBDC ready and available as early as 2023. The central bank also proposes that Kazakhstan improves the functionality of the digital currency, albeit in different phases within the stipulated timeframe. This is so that by the end of 2025, the CBDC may be fully launched on a commercial operational scale.
Phases of Launching Kazakhstan CBDC
The first testing phase for Kazakhstan’s CBDC project took place between July and December of 2021. During the period, it created a prototype to determine how practicable the entire CBDC idea is.
The second phase as it were, is the one that was just concluded. It started in January 2022 and was run up until this month. During the phase, the platform was tested with random users within the financial sector.
For the third phase, which entails the deployment of the national digital currency, expectations are that it begins in January 2023, and extend throughout 2024. During this stage, developers will be focused on providing solutions for use in commercial transactions.
By the fourth phase, NBK hopes to roll out the CBDC to a wider range of users. And all things being equal, the final phase is expected to be reached by December 2025.