ALMATY – Kazakhstan to begin using the digital tenge in public procurement from August after completing the integration of the digital currency platform with the Finance Ministry’s information systems, reported the Prime Minister’s press service on July 22.
Deputy Prime Minister and Minister of National Economy Serik Zhumangarin chaired a meeting to review the progress on pilot projects testing the central bank digital currency. Photo credit: PM’s press service.
The announcement followed a government meeting chaired by Deputy Prime Minister and Minister of National Economy Serik Zhumangarin, where officials reviewed progress on pilot projects testing the central bank digital currency and discussed challenges to its wider implementation.
According to the ministry, the legal status of the digital tenge platform and its operating procedures have now been established. A total of 340 billion digital tenge (US$626 million) has been issued, with 20 pilot projects completed, 10 underway, and 50 more in preparation.
Beginning in August, the digital tenge will be used for public procurement of goods, including medicines, fuel and lubricants, and other material supplies. Pilot projects cover infrastructure construction, budget lending and subsidies, grant financing, government support measures, public procurement, tax administration, as well as procurement by the National Bank and quasi-state entities.
The government has also introduced mandatory use of the digital tenge for eight categories of budget expenditures covering projects worth more than 100 million tenge (US$184,000).
Officials identified end-to-end traceability of public funds as one of the main challenges to expanding the project. According to the government, while digital tenge transactions can already be tracked from budget allocation to the main contractor, many subcontractors are not yet prepared to conclude smart contracts because current legislation does not require their use.
To address the issue, the ministry has prepared amendments to existing legislation that would establish the legal framework necessary for wider adoption of smart contracts and improve transparency throughout the public spending chain.
