Kazakhstan ramps up block reward mining venture as central bank preps CBDC

Kazakhstan has said it intends to double investment in its block reward mining industry, as the government increases its focus on the opportunities in digital assets.

According to a government notice, the move comes amid plans to launch a central bank digital currency (CBDC), as part of a government strategy to become a center for the global block reward mining sector.

The country’s block reward mining efforts have thus far attracted investment of 82.6 million Tenge, approximately $20 million. The government reportedly intends to double that investment by a further 80 million Tenge in 2020.

To build on the progress, the country’s central bank is currently designing a CBDC, which would eventually allow businesses and consumers to pay in fiat currency on the blockchain.

In a statement, the Central Bank of Kazakhstan said its focus in developing the CBDC was to ensure consistency with overarching monetary policy aims.

“The main task of the central bank is to maintain inflation targets and financial market stability, and the digital currency solution is the second priority. The key is to ensure that the design of a digital currency system is consistent with the objectives of monetary policy.”

The Astana International Financial Center is currently working on the project, helping develop a legal framework for the new CBDC in the country. The AIFC protocol includes legal definitions for a number of terms, including digital currency classifications, smart contract, and digital wallet.

The opportunities for countries like Kazakhstan to capitalize on digital currency are significant. Low energy costs locally make the country an attractive choice for block reward mining firms.

With work ongoing to develop the legal framework around the digital currency industries, it looks set to become an even more appealing destination for those investing in block reward mining operations.

To learn more about central bank digital currencies and some of the design decisions that need to be considered when creating and launching it, read nChain’s CBDC playbook.