⚠️ HRF CBDC ⛓️🪙 alert from HRF for Kazakhstan (29-JAN-2024)

🗝️ℹ️ (Key Information)

CBDC Status: Launched

CBDC Launch: 2023-11-15

CBDC Model: n/a

CBDC Issued: n/a

Inflation Rate: 8.04%

One-sentence Summary:

Kazakhstan launches CBDC, "digital Tenge", seen as major progress in financial technology but raises concern over human rights and freedom in the country.

✅🇰🇿 is moving forward with the launch of CBDC referred as the "digital tenge" with first transaction made by Binur Zhalenov, chairman of the National Payment Corporation, on November 15, 2023.

✅CBDC is developed in partnership with Mastercard and Visa, making it usable via a payment card in retail outlets, online stores, and various websites.

✅The development of Kazakhstan's CBDC has been ongoing since May 2021 as outlined in the Digital Tenge Public Discussion Report, with the first pilot project activated in June 2021.

✅By July 2022, the National Bank of the Republic of Kazakhstan published a framework for CBDC issuance, evaluating the necessity, benefits, and potential risks of its implementation.

✅In February 2023, in conjunction with Binance, the National Bank of the Republic of Kazakhstan issued a report noting that the success of CBDCs will largely depend on their impact on financial stability and protection of privacy.

✅By December 2023, the central bank of 🇰🇿 published a report detailing their latest CBDC pilot results, confirming that "CBDC bank cards” are interoperable with other payment options and its implementation reduces the likelihood of errors.

✅Despite these strides in financial technology, Kazakhstan scores a low 23 out of 100 in Freedom House's 2023 Freedom in the World report, indicating concerns over government corruption, undue restrictions on peaceful assemblies, and abundant corruption at all government levels.

✅The introduction of CBDC might exacerbate these issues by providing an easy route to freeze and seize money from activists, political rivals, and protestors, and potentially allowing more pervasive corruption concerning its usage and policies.

#Kazakhstan #CBDC #HumanRights #FinancialInclusion #GovernmentCorruption

Question:

In light of Kazakhstan's commendable progress in financial technology with the development of CBDC, what checks or measures need to be put in place to ensure this development does not serve as a tool for human rights infringements and government corruption? How can digital currency maintain its core purpose of promoting financial inclusion amidst these potential risks?

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