China, Kazakhstan Central Banks to Cooperate on Digital Currency

Last week China’s President Xi Jinping visited Kazakhstan.The Chinese government reported that the country supports Kazakhstan becoming a member of BRICS and President Xi penned an article in a Kazak newspaper. The National Bank of Kazakhstan and the People’s Bank of China signed a memorandum of understanding to cooperate on digital cy. This was one of 31 contracts executed between the countries.

Last October China signed a similar agreement with the UAE and used the digital renminbi to settle a crude oil transaction later that month. The UAE is also a founding participant of mBridge the cross border central bank digital cy (cross border CBDC) project where China developed the technology. Additionally, the UAE was the first to execute a live transaction on mBridge, making a Dirham 50 million ($13.6m) payment to China in January. mBridge recently launched a minimum viable product (MVP).

The National Bank of Kazakhstan is not a participant in mBridge but is an observer on the project, alongside another 22 central banks. The country has been working on CBDC, with plans to go live next year. When it released a status report last year it said the initial focus was retail CBDC for consumer transactions with a clear path to production. However, it said it was researching wholesale CBDC and its use for interbank settlements and cross border payments.