Kazakhstan is the latest country to potentially consider a central bank digital currency (CBDC), according to Coindesk Thursday (May 6).
The National Bank for the Republic of Kazakhstan said it plans to call the new digital coin the “digital tenge.”
In Kazakhstan, the tenge is the basic monetary unit and is usually worth 100 teins, or $0.23.
The bank will provide the infrastructure of the CBDCs. Before issuance, it will need to conduct a “comprehensive study” on the benefits and risks a digital currency poses and the methods used to distribute it. There will be research done on CBDCs with participation from the financial markets.
The news follows other central banks doing the same, such as Norges Bank and the Bank of Japan, which both announced they were looking into a CBDC as well.
And China has been far ahead of the rest of the world, having run tests on platforms on which the digital yuan can be freely traded with fiat currencies. The country also ran several tests in which people could get digital yuan in a lottery to spend and see how it worked out in actual practice.
Citi, in a report called “Future of Money: Crypto, CBDCs and 21st Century Cash,” posited that the future of money would be in tokenization. The report said tokenization would be seen across numerous offerings, spanning cryptocurrencies, stablecoins and CBDCs.
The report said at the current time, the world is faced with “different paths” and will eventually spawn into new, different digital forms. But the report did note that the huge popularity of cryptos like bitcoin and ether was a key factor in the development of digital money.
The report said the attempts by central banks to make CBDCs are in response to big tech firms’ ambitions to build new payment rails.