New regulatory agency formed in Kazakhstan to oversee CBDC development

New regulatory agency formed in Kazakhstan to oversee CBDC development

The National Bank of the Republic of Kazakhstan (NBK) has taken a significant step towards the development and implementation of its central bank digital currency (CBDC), the digital tenge, by establishing a dedicated entity called the National Payment Corporation (NPC). This move, as announced on September 15, marks a crucial development in Kazakhstan’s digital financial infrastructure.

The NPC is formed based on the former Kazakh Center for Interbank Payments and is tasked with overseeing various aspects of the national payment system. This includes responsibilities such as managing interbank clearing services, facilitating money transfers, and overseeing digital identification processes.

Moreover, the National Payment Corporation is entrusted with the development of the “digital financial infrastructure,” with a particular focus on the implementation of the digital tenge. This initiative to create the digital tenge commenced in February 2023, with a targeted completion date set for 2025. NBK’s deputy governor, Berik Sholpankupov, previously outlined the central bank’s vision, which involves fostering collaboration between traditional finance and decentralized finance (DeFi) to enhance financial inclusion and support international trade.

Currently, the CBDC pilot program in Kazakhstan is in progress, conducted within a controlled environment and involving real consumers and merchants. A key partner in this endeavor is Binance, the world’s largest cryptocurrency exchange, which is providing technical support through its BNB chain solution.

In June, Binance made headlines by launching a regulated digital asset platform in Kazakhstan, a venture undertaken in partnership with the local Freedom Finance Bank. This platform allows users to transfer fiat funds to their accounts on the Binance platform, further contributing to the development of the country’s digital financial ecosystem.

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