Kazakhstan expands digital tenge use to monitor public spending

Kazakhstan will begin routing selected government expenditures worth more than 100 million tenge ($190,000) through its digital tenge platform, expanding the use of the central bank digital currency to strengthen oversight of public spending.

Tighter controls on budget spending

The government says the system will improve transparency by allowing funds to be tracked throughout the payment process and preventing them from being used for purposes other than those originally approved.

The new rules will apply to road construction and reconstruction projects, purchases of medicines and medical equipment, fuel procurement, vehicle acquisitions, selected repair works and the maintenance of national roads. The mechanism will also cover spending from the Special State Fund, budget loans issued to local authorities and specialised organisations, and grants aimed at commercialising scientific research.

The digital tenge can be programmed for specific purposes, meaning funds allocated to one project cannot be diverted elsewhere. Money earmarked for a road project, for example, cannot later be used for unrelated goods or services.

To support the system, each expenditure item will receive a unique identifier during budget planning or the public procurement process. The identifier will follow the transaction throughout the payment process, allowing authorities to track the movement of funds and verify that spending matches its intended purpose.

How the system will work

Payments will only be released after goods have been delivered or work has been completed. Completion certificates, electronic invoices and other supporting documents will be required before payment can proceed.

Once obligations have been verified, the Ministry of Finance and the National Bank will convert conventional non-cash tenge into digital tenge and execute the transaction.

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Under the new framework, the National Bank will operate the digital tenge platform and oversee the issuance and redemption of the currency. The Treasury Committee will process budget payments and manage conversions into digital tenge, while central and local government bodies will confirm funding requirements and verify contractual obligations.

Growing role for digital currencies

Deputy Finance Minister Asset Turysov said nearly 339 billion digital tenge (about $645 million) has already been issued.

The expansion comes as governments around the world explore central bank digital currencies as tools for improving the management of public finances. Turysov said Kazakhstan has no plans to use the digital tenge to monitor citizens' personal finances and that the initiative is limited to the administration of state spending.

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