February 5, 2023

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Kazakhstan, known as the 3rd-biggest hub for Bitcoin mining across the globe after China and the United States, discovered the feasibility of introducing a digital tenge (an in-house central bank digital currency).

The National Bank of Kazakhstan (NBK) disclosed the discovery after the accomplishment of the 2nd stage of testing.

Central Bank of Kazakhstan Proposes a Stepwise Launch of CBDC

Changpeng Zhao (the CEO of the crypto exchange Binance), during October’s latter part, declared that the CBDC project of the country would have an integration with his platform’s blockchain called BNB Chain.

Kazakhstan’s main enthusiasm for organizing research on a CBDC program was to examine its capability to enhance the country’s financial inclusion, improve innovation and competition in the industry of payments, and elevate its global competitiveness.

The attention of the pilot research was on offline payments. The programmability thereof suggested the infrastructure players’ and market members’ inclusion for diverse scenarios.

It proposed that the language that the regulators would use should be clarified. The new research paper added to the intent of the country to release its digital tenge.

As per the report, keeping in view the requirement for additional technological advancements, infrastructure preparation, advancement of a functional model, as well as a regulatory agenda, it is suggested to guarantee a stepwise implementation spanned over 3 years.

The central bank of the country recommended that the in-house CBDC should be made available in the coming year.

However, it suggested a stage-wise expansion of its operations and its release into commercial market-based activities till 2025’s end.

A lot of citizens from Russia left the country to get into other nearby jurisdictions amid the uncertainties related to its conflict with Ukraine. In such a situation, Kazakhstan declared legalizing a mechanism to transform crypto assets into cash.

While making remarks on this, Kassym-Jomart Tokayev – the president of Kazakhstan – stated that they are prepared to move ahead.

He added that if the respective financial instrument expresses its additional security and relevance, it will surely obtain complete recognition. The president made this statement while appearing at the Digital Bridge 2022 (an international forum).

A few days back, the reports pointed out that the country may not play the role of a Bitcoin reserve anymore because of its latest regulation regarding crypto mining.

The policymakers of Kazakhstan have approved some laws and a bill covering crypto mining. After the great miner exodus from China, the country came to the front as a jurisdiction that was preferred by the miners because of economic electricity.

The Country Approves Stringent Crypto Mining Laws

Nonetheless, with the boom witnessed in crypto mining, policymakers have moved toward aggressive measures against this market.

As a result of this, there will be a requirement for the miners to buy just surplus energy from the public grid. They can also purchase electricity via the Kazakhstan Electricity and Power Market Operator exchange.

Nevertheless, the common masses will not be permitted to carry out this buyout because auctions would be conducted to sell the electricity, meaning that it would be very expensive. Apart from that, the process of mining license has two categories.

The initial one takes into account the miners who possess adequate infrastructure and data processing units with adequate security, location, and equipment-related requirements.

The 2nd category deals with digital miners who hold equipment and rent chambers in centers specified for data processing with no claim on energy quota.

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