Kazakhstan Introduces Digital Nationwide Foreign money

By Almaz Kumenov 

(Eurasianet) — Kazakhstan’s Nationwide Financial institution has issued a digital analogue to the nationwide foreign money, the tenge, as a part of a said try to streamline on a regular basis monetary transactions and cut back corruption.

Talking at a press occasion on November 21, Nationwide Financial institution deputy chairman Berik Sholpankulov described the Digital Tenge, or DT, as “a brand new cost software that meets the realities and challenges of the digital modern economic system.”

Whereas sharing some options with cryptocurrencies, DT is distinct in essential methods. Most notably, it’s centrally issued by the Nationwide Financial institution reasonably than circulating inside an open and unregulated blockchain community.

Binur Zhalenov, head of the Nationwide Fee Company, a subsidiary of the Nationwide Financial institution that’s accountable for growth of DT, talked up the digital platform’s potential for enhancing transparency in authorities spending.

“Cash within the price range in Digital Tenge may be marked for particular makes use of. After the expenditure has taken place, this marking will disappear,” Zhalenov stated. “It will … guarantee public and authorities management over price range spending.”

Zhalenov sought to go off issues about privateness by insisting that the federal government wouldn’t use the platform to trace the motion of non-public cash of the general public. Holders of the foreign money will, in the meantime, have the ability to management and vet how it’s getting used, he stated.

By means of an instance, Zhalenov stated mother and father would have the ability to program DTs to manage their kids’s spending, together with by setting prohibitions on the acquisition of cigarettes and alcohol.

The creator of DT say it’ll even be accessible to be used in transactions when both the customer or vendor, or each, are offline. It is a notably interesting choice in areas of the nation the place cellular indicators are weak to non-existent.

Builders of the digital foreign money stated that they based mostly their mission on the precedent of China’s expertise of implementing its digital yuan. Zhalenov, who claims to already be receiving his wage in DT, stated Kazakhstan could go down the Chinese language route of utilizing biometric knowledge, resembling fingerprints, for effecting funds.

The Nationwide Financial institution started its efforts to roll out the digital tenge round two years in the past, initially specializing in safety points. Final yr, it examined the platform along with native monetary establishments. The plan is to develop the current scope of the foreign money to incorporate capabilities like cross-border transactions by 2025.

The general public in Kazakhstan is already well-used to utilizing monetary know-how merchandise for even the only transactions. Native lender Kaspi Financial institution has all however cornered the marketplace for digital transactions with its e-wallet app.

This has confirmed one thing of a headache for the taxman, although. Market retailers, for instance, had been at one stage in a position to freely dodge paying gross sales taxes by having consumers determine cash transfers as merely “monetary help.”

Underneath laws adopted in 2021, nonetheless, merchants and taxi drivers, who’ve usually achieved a lot of their enterprise within the shadows, fiscally talking, are required to separate their cellular money transfers between particular person and enterprise accounts. Financial institution had been obliged to expose data on money transactions to the tax authorities below that very same laws.

However protestations about privateness, cynics could also be inclined to suspect that the digital tenge mission is being designed by the authorities to present themselves one other means by which to maintain tabs on who’s spending what, the place and when. 

Almaz Kumenov is an Almaty-based journalist.