On March 27, the bank began issuing short-term notes worth 50 billion tenge ($155.50 million). The notes have a maturity of one year and carry an interest rate of 8.5%. The price of notes is set to increase gradually. For example, the value of a 92.19 tenge ($0.286) note issued today will rise to 92.21 tenge ($0.286) the next day and so on. A year later, the note will carry a face value of 10 tenge ($0.31). There is no limit to the amount which can be invested in the note. An investor will not earn anything if the security is bought and sold on the same day.
The cryptocurrency created specifically for the purpose of buying and selling the notes can be easily converted into tenge. The electronic wallet can be loaded with cash via terminals or using a bank account. However, the reverse conversion is allowed only through a bank account.
The app can be downloaded from Play arket and the App Store. Registration can be completed using electronic digital signature or personal account in the Single Accumulative Pension Fund. Any Kazakh citizen can join the system through a central securities depository account.
National Bank Chair Daniyar Akishev explained the innovative solution.
“First of all, blockchain technology was for the first time used on a state level. Each transaction is recorded as a series of individual blocks, which ensures information is safe and unchangeable. Secondly, it is the first time for the National Bank to issue electronic currency applicable for securities transactions. Finally, all the transactions are available online on electronic devices.”
The system operates round-the-clock and all the transactions are free of charge since no commission or any other kind of taxes are levied. The notes are also highly liquid. So, they can be sold and converted into cash at any time without risk of losing value. Furthermore, the income is accrued on a daily basis. The transactions and income accrued can be monitored on the personal account in the system.
Akishev added
“The technological capabilities of the system will allow trading not only National Bank’s notes, but also securities of Kazakh companies entering an IPO to attract funds. In the future, Invest Online will be a safe and convenient platform for Kazakh citizens to trade any security.”
While the Kazakhstan government has shown an openness towards the blockchain technology, its central bank is totally against the use of cryptocurrencies such as Bitcoin. The central bank is considering a blanket ban on all activities related to cryptocurrencies: using as payment, trading through exchange, operating exchange, and mining. The National Bank believes that virtual currencies are an ideal vehicle for fraud, money-laundering, and tax evasion.