CBDC News: China & Kazakhstan Sign Collaboration Agreement

What to Expect From the Collaboration Agreement?

China and Kazakhstan support the same position concerning the central bank digital currencies. The National Bank of Kazakhstan and the People’s Bank of China (PBoC), two central banks from Asia have agreed on a memorandum that is meant to enhance the research and training on central bank digital currencies (CBDC).

Both the central banks have agreed to share information and practices, conduct studies on CBDCs, and improve the knowledge of their staff. The project will be accomplished with the assistance of the PBoC’s Digital Currency Institute and the Kazakhstan National Payment Corporation.

The cooperation between the two countries’ central banks started within the state visit of the President of the People’s Republic of China, Xi Jinping to Kazakhstan and signing of the Memorandum of Understanding. This agreement will enhance collaboration in the development of CBDCs. The memorandum establishes a framework for sharing information and the results of research on CBDC between the two institutions.

CBDC: Yuan Replacer?

China started testing its CBDC known as the e-CNY in 2019. While it started off slowly, the adoption has since increased at a faster rate. By 2022, 26 cities were in the pilot. It was estimated that 6 million merchants across the country had signed up to use the digital currency.

The scenario suggests the adoption of CBDC in China. The two mobile payment systems, AliPay by Alibaba and WeChat Pay by Tencent, enhanced the popularity and usage of mobile payments. In this regard, a CBDC is a new type of money that can either substitute or complement physical cash as a medium of exchange for the value of the domestic currency. Mobile money on the other hand is not a new type of currency but rather a new way of performing payment transactions.

The National Payment Corporation of Kazakhstan’s National Bank and the Digital Currency Institute of China’s People’s Bank are expected to become the key performers of the memorandum’s goals. Their participation will guarantee the efficient realization of the common objectives as stated in the agreement.

Stressing the significance of this cooperation, the document focuses on the role of the international cooperation in the sphere of finance. It also shows that both nations are committed to the adoption of innovation and a strategic shift towards the cryptocurrency market.

Conclusion 

The collaboration between China and Kazakhstan on CBDC development marks a significant step towards enhancing digital currency research and innovation. Through the Memorandum of Understanding, both nations aim to share knowledge, conduct joint research, and improve employee competencies. This partnership underscores the importance of international cooperation in the financial sector and reflects a mutual commitment to advancing digital solutions and embracing innovation.

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