The National Bank of Kazakhstan (NBRK), Kazakhstan’s central bank, has planned to examine the potential benefits and risks of adopting a state-backed digital currency (CBDC).
It has been reported that the bank has published a report last Wednesday on a digital tenge pilot project and opened a public consultation on the potential central bank digital currency.
However, according to the report, the digital tenge would be a new form of money issued by the NBRK to enable the “further development of the national payment system and reduce reliance on cash settlement using unique technical features.”
Kazakhstan moves forward with the national digital currency plans by initiating a public consultation on a digital tenge. https://t.co/uaHaW6aPdJ — Cointelegraph (@Cointelegraph) May 6, 2021
The bank emphasized that the CBDC is not intended to replace either cash or cashless payments but would rather be an alternative used in parallel with existing payment solutions.
The report said that the NBRK noted that the digital tenge would improve competitiveness in the payment market, strengthen the stability of the financial system, as well as contribute to increasing public trust in state-backed payments.
The NBRK stated:
“The technology will meet the highest cybersecurity standards. […] The bank will pay special attention to consumer protection and the privacy of digital tenge users.”
Likewise, the bank will first conduct a comprehensive study of benefits and risks related to a potential CBDC.
Thus, in collaboration with financial market players and global partners, the NBRK also plans to define the digital tenge’s objectives, issuance and distribution methods, the applied technology, and the potential impact on monetary policy, financial stability, and the payment ecosystem.
Source: Cointelegraph | Image: Azer News | Fintech News