Kazakhstan central bank recommends a phased CBDC rollout between 2023-25

The National Bank of Kazakhstan (NBK) and the Payment and Financial Technology Development Center of the Bank of Kazakhstan (NBK) published a report on the results of the study on the need to introduce the digital tenge. It is reportedly recommending making the central bank digital currency (CBDC) available as early as 2023 with a phased expansion of functionality and introduction into commercial operation until the end of 2025. Unfortunately the report won’t be available in English until later this week, at which point I’ll be able to verify some of the facts and plans. For example, the report is saying that a pilot was just wrapped up, but it’s unclear whether it’s a pilot of proof of concept, since I don’t know the composition of the test users. If they’re pulled from the general public, it is a pilot, but if the test subjects are limited to central bank staff, it’s a proof of concept by my taxonomy. [Download the report here]

How to design a compliant, privacy-preserving fiat stablecoin via zero-knowledge proofs

etonec published a paper co-written by my good friend and frequent collaborator Jonas Gross that explores the feasibility of a (fiat) stablecoin that provides similar privacy guarantees to cash while enforcing compliance with anti-money laundering and countering the financing of terrorism regulation. The concept enables cash-like private digital stablecoin transactions up to specific monetary limits. If these monetary limits are reached, transactions are conducted in a less private way, e.g., fully transparently on a blockchain or via including third parties that approve the transaction. High privacy guarantees and compliance with limits are ensured in a trustless way via the use of cryptographic zero-knowledge proofs. To effectively implement turnover limits, the concept relies on the availability of a unique digital ID available to all participants of the stablecoin system. Payments by one person can then be mapped to one ID and summed up. This summing up is necessary to ensure that a participant can only open one private stablecoin account. Yet, only the owner of a unique digital ID and the corresponding account can do this mapping. [Read more at etonec]

Kiffmeister’s Global Central Bank Digital Currency Monthly Monitor

Just a reminder that I produce a monthly digest of central bank digital currency (CBDC) developments exclusively for the official sector. So for any of you out there who work for a central bank, ministry of finance or international financial institution who would like to receive it by email on the first business day of every month, please DM me on LinkedIn or email me at chronicles@kiffmeister.com.

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