Kazakhstan will use digital tenge to finance the construction of a railway to China: the details.
The National Bank of Kazakhstan (NBK) will leverage its CBDC, the digital tenge, to finance the construction of a new railway line to China (Dostyk-Moiynty). The project marks the beginning of the second phase of the CBDC introduction. The bank plans to extend the use of the digital tenge to other state projects, including agricultural and construction projects.
The funds allocated for the railway line construction have been marked on the national platform. These marked digital tenge will be used to pay only the companies and organizations that meet all the necessary requirements to be involved in the project. According to the bank, this technology allows for “efficient spending and better control over state funds.” This way, the payment process ensures that all suppliers and contractors receive due payments, mitigating the risks of misappropriation of funds and ensuring transparency and efficiency in public spending, the bank explained.
Participants and expansion
Several companies and institutions will participate in the project, including JSC Samruk-Kazyna, JSC National Company Kazakhstan Temir Zholy, JSC Kazpost, and JSC Halyk Bank of Kazakhstan.
The NBK plans to expand the use of the digital tenge platform. The expansion will include more participants and will use the platform for other projects funded by the National Fund of the country. In collaboration with the government and the Anti-Corruption Agency of Kazakhstan, the bank intends to launch additional pilot projects aimed at state spending in sectors such as agriculture, construction, and digitalization of state support measures. There are also plans to digitalize tax administration and facilitate cross-border payments in national digital currencies.
The first phase of the digital tenge pilot project concluded in December and included testing a wide range of functions, from providing free school meals to implementing cross-border payments in the SWIFT system.
The results of the second phase of the digital tenge introduction will be presented in a final report by the end of 2024. The country aims for full implementation of its CBDC by 2025.
