Kazakhstan CBDC pilot drastically reduces VAT refund wait
Kazakhstan has initiated a pilot project for its central bank digital currency (CBDC), significantly enhancing the efficiency of value-added tax (VAT) reimbursement. By integrating the digital tenge into business-to-business transactions, the National Bank of Kazakhstan (NBK) reduced refund processing times from 70-75 days to just 10-15 days. This advancement aims for instant reimbursement in the near future, primarily due to the removal of manual checks by the State Revenue Committee. The NBK's chief digital officer, Binur Zhalenov, highlighted upcoming pilot projects utilizing digital tenge for public procurement and funding from the sovereign wealth fund. The initiative illustrates the potential applications of programmable money in improving government operations. Since its development began in February 2023, the digital tenge has seen around 40 billion tenge ($81.8 million) in circulation, with various uses being tested, including the construction of a rail line funded exclusively through the CBDC. This pilot exemplifies how Kazakhstan is leveraging programmable money to enhance financial processes and government efficiencies.
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