Baku: A strong infrastructure must be established for the creation of a common digital currency among Turkic states, Elena Bakhmutova, Chairperson of the Council of Kazakhstan’s Association of Financiers, expressed in an interview with APA-Economics.
According to Azeri-Press News Agency, Bakhmutova emphasized the importance of collaboration between Kazakhstan and Azerbaijan in the realm of digital assets, central bank digital currency (CBDC), and cybersecurity. During her visit to Azerbaijan, she highlighted the agreement signed as a pivotal step toward future cooperation, particularly in exchanging ideas on anti-fraud centers and cybersecurity, which could be beneficial for Azerbaijani counterparts.
Kazakhstan is making strides in digital financial assets, although these are not yet recognized as classic financial assets under current legislation. A special regime exists within the Astana International Financial Centre, enabling the trading of digital financial assets. The National Bank has taken legislative initiatives to make these assets accessible to both financial institutions and ordinary citizens. Plans are also underway to create licensed cryptocurrency trading platforms open to banks, insurance companies, and securities market participants.
The digital currency project in Kazakhstan, known as ‘Digital Tenge,’ has completed its initial phase. This digital currency aims to enhance transparency in public finance management and budget expenditure tracking. It is particularly beneficial in remote areas with low internet connectivity. Bakhmutova noted that while Kazakhstan has established a strong infrastructure for this initiative, similar efforts are necessary at the level of central banks among Turkic countries to implement a joint CBDC.
Challenges for Azerbaijan in entering this field include the significant financial resources required for infrastructure development, technology implementation, and training. In Kazakhstan, such initiatives are overseen with separate budget control by the government.
Cybersecurity remains a crucial issue globally, with Kazakhstan having dedicated state bodies for this purpose. Banks are often blamed for cybersecurity issues, although responsibility can lie with various parties. Cybersecurity is essential not only for banks but also for state information systems. The rise of digital payments has also increased fraud risks, leading Kazakhstan to establish an Anti-Fraud Center under the National Bank, working collaboratively with banks and telecommunications companies.
Kazakhstan’s government monitors cyberfraud closely, and while the overall scale is not large, concern is growing as user numbers increase. The country collaborates with international partners like Visa and Mastercard to implement artificial intelligence-driven countermeasures against cyberfraud.