The National Bank of Kazakhstan (NBK) stated that it is using R3’s Corda platform to conduct a pilot of the Central Bank Digital Currency (CBDC), or digital tenge. NBK emphasized Corda’s ability to maintain “anonymity, confidentiality and traceability of transactions” and open source code. The pilot was launched in May and involved Kaspi Bank JSC and Eurasian Bank JSC, two of the country’s largest commercial banks. This report is the second report this year based on digital tenge, which considers CBDC use cases and potential monetary and financial implications.
In the two-tier CBDC model being explored by NBK, the central bank supervises the entire system. Small banks open digital tenge wallets for users to “exchange, redeem, restore digital tenge and perform inter-bank transfers.” Similar to cash, digital tenge tokens will not be recorded on the bank’s balance sheet, but will only be recorded in the user’s digital wallet, ensuring that tenge transactions are different from bank wire transfer payments.
According to the report, the token can be programmed so that only authorized public institutions can allocate funds, and personal spending methods will be restricted. The report is optimistic that digital tenge can promote more financial inclusion. The document also suggests that CBDC should be available offline to ensure that people who cannot access the Internet can also use the currency. Although it stated that technical solutions to prevent double spending in this situation have yet to be developed. NBK plans to complete more trials and research by July 2022 before deciding whether to launch digital tenge in December.