Kazakhstan Sets Up National Payment Corporation To Lead CBDC Efforts

The National Bank of Kazakhstan (NBK) has unveiled the National Payment Corporation (NPC), a body charged with the implementation of digital financial infrastructure and the digital tenge.

According to an official press release on Sept 15, the NPC will oversee efforts at rolling out the county’s Central Bank Digital Currency (CBDC) digital tenge.

The new body is a reorganization of the Kazakhstan Center for Interbank Settlements and will also supervise the National Payment Systems, Digital identifications, Interbank money clearing and transfers.

“The National Bank of Kazakhstan (NBK) informs about the creation of the National Payment Corporation (hereinafter referred to as the Corporation, NPK JSC) through the reorganization of the RSE “Kazakhstan Center for Interbank Settlements” (KISC).”

Per the release, the restructuring is billed to scale the efficiency, and security of the country’s payment architecture and develop digital infrastructure services to incorporate new possibilities. 

Kazakhstan launched efforts towards its CBDC in February with a planned introduction before 2025, a move characterized as highly achievable among many quarters. 

At the time, the NBK cited a need to strike a synergy between traditional and decentralized finance (DeFi), financial inclusion among several demographic and industries, and global payments.

The country has kicked off pilots with selected merchants and consumers in partnership with Binance. Binance recently announced investments in the country including opening a digital asset exchange in the country and partnerships with local banks.

Kazakhstan crypto regime 

Last year, Kazakhstan was hailed for becoming a huge digital asset hub in Central Asia after the country recorded increasing adoption in crypto users and Bitcoin (BTC) miners. 

After the Chinese mining ban, Kazakhstan became a new mining hotspot alongside Texas and other jurisdictions. However, recent developments like the fall of FTX and heightened power supply pressure may have led to slight changes in policy.

In February, the country’s President signed a law to limit energy usage for crypto miners following a huge influx of new miners which added an extra 1.5GW growth on the national grid. 

Unlike the former framework, the law allows crypto miners to utilize power from the grid only when there is a surplus and will only be distributed to licensed miners. Miners who generate their power from renewable sources outside the national grid are exempted from the law

The law also looks to tweak the tax regime in the industry alongside mining pools that registered firms can use with a further obligation for miners to sell their crypto to exchanges registered and operating in a special economic zone, the Astana International Finance Center. 

Financial authorities have also released statements on assets custody following the fall of FTX with some observers describing the recent push to CBDCs as a change of stance from private cryptocurrencies.