The State of Kazakhstan’s Digital Tenge

Binur Zhalenov, chairman of the board for the Center for Development of Payment and Financial Technologies of the National Bank of Kazakhstan, recently spoke at the FinTech without Borders: Digital Asia forum to discuss the development of a national digital currency in Kazakhstan (the digital tenge). Mr. Zhalenov noted that, while no decision on implemented the digital tenge has yet been made, they are actively studying it. Moreover, they plan on publishing a report with their findings by the end of this year. This report is expected to outline:

  • At what level, if any, the digital tenge should be implemented (i.e. which entity(ies) will be able to use it)
  • What role(s), if any, the digital tenge should play in the country’s payment system
  • How the digital tenge could be used to integrate the monetary properties of fiat currencies and cryptocurrencies, especially as payment instruments

Mr. Zhalenov also noted several critical issues that need to be worked out before a decision can ultimately be made regarding the introduction of the digital tenge, most notably:

  • Liquidity-related risks, especially among second-tier financial institutions
  • Hidden competition between the regulator and payment service providers
  • Possible ecosystems for the digital tenge
  • Technological risks, including setting up offline payment solutions and resolving cybersecurity issues
  • Expected impacts on monetary policies and overall financial stability
  • Ensuring a proper regulatory environment is prepared

Click here for more information on the status of the digital tenge (in Russian).