The Kazakhstan central bank said it is planning to pilot a central bank digital currency (CBDC).
- In an announcement Wednesday, the National Bank of the Republic of Kazakhstan said it plans to pilot a new legal tender dubbed the “digital tenge.”
- The tenge is the basic monetary unit in the country equal to 100 teins ($0.23).
- The bank said it will provide the infrastructure for the CBDCs but before issuance it needs to conduct a comprehensive study of the benefits and risks associated with a digital currency and the method used to issue and distribute it.
- The next step will be to conduct research around CBDCs with participants from the financial markets.
- Many other central banks around the world are already carrying out similar experiments.
- In April, Norges Bank announced it is moving ahead and will start testing technical solutions for a CBDC over the next two years.
- The Bank of Japan announced plans to begin phase one of experimenting with a CBDC by conducting experiments on the basic functions such as issuance, distribution, and redemption.
- In the meantime, China, which is further ahead in the CBDC race than other major powers, has been testing platforms on which the digital yuan can be freely traded with other fiat currencies.