Kazakhstan is advancing the sphere of digital finance with the introduction of a pilot project of its central bank digital currency (CBDC), the digital tenge. The National Bank of Kazakhstan (NBK) in conjunction with the Ministry of Finance has delivered the expeditious VAT refunds for exporters by demonstrating the benefits of programmability of the digital tenge.
Giving Back VAT Faster With The Digital Tenge
Binur Zhalenov, Chief Digital Officer at NBK, confirmed on LinkedIn that the conduct of the pilot program has optimized waiting for the VAT refund to a minimum of 10 to 15 days from the former average of 70 to 75 days. The goal is to even do better and attain instant refunds very soon. This enhancement is primarily attributed to the automation of VAT stamping out rather involving bulky manual inspection services by the State Revenue Committee.
Zhalenov pointed out that programmable money has immense potential in improving government and financial efficiency. It is similar to the way in which there are currently 40 billion tenge translated into approximately 81.8 million dollars already in digital form.
Programmability: A Key Feature
The digital tenge has become under development since February 2023 and programmability has been at the very focal point of the development. This is a forward-looking feature, not only to improve efficiency of existent financial systems but also to ensure anti-corruption strategies against misuse of such systems. Out of the blue, Kazakhstan’s Center for Interbank Settlements modified the corporate structure and renamed the whole unit National Payment Corporation in order to deepen the infrastructural ecosystem for cbdc.
The November 2023 pilot proved the multifunctionality of the digital tenge for both retail and wholesale channels. Local banks started offering Visa and Mastercard debit cards that are linked to cdbc avails, among other uses that include a stablecoin backed by a digital tenge, gold equipped with electronic tokens and services offered through cross border swifts.
Innovative Applications in Public Projects
One of the striking projects that employ the digital tenge was for constructing a railway from the center of Kazakhstan to its neighbouring country, China. The system was designed in such a way, that payments were made only to those organizations who performed certain duty, which demonstrated the potential of the CBDC to ensure compliance and accountability of funds used in the project.
And as the country goes on advancing the use of its CBDC, the advantages of programmability and efficiency are also being more emphasized making the such financial system more enhanced.