Digital Sovereignty and Financial Dominance: The Case for CBDC in the Shadow of Kaspi in Kazakhstan

Kazakhstan's political economy, long reliant on oil exports and marked by foreign ownership in extractive sectors, has struggled to retain domestic wealth. A similar extractive dynamic now emerges in its financial space through Kaspi, the dominant fintech platform. Kaspi's sprawling ecosystem, encompassing payments, lending, and commerce, risks quasi-monopolistic control and distorts monetary policy by shifting financial activity outside traditional channels. This paper analyses the macroeconomic and political consequences of Kaspi's dominance, particularly concerning Kazakhstan's planned Central Bank Digital Currency (CBDC), the Digital Tenge. We argue that the CBDC is more than a technological upgrade; it is a strategic instrument to reassert public control over monetary transmission and financial infrastructure. Drawing parallels between oil sector resource extraction and potential financial extraction by foreign shareholders in digital platforms like Kaspi, we contend that a state-led digital monetary infrastructure is vital. Such infrastructure could restore public leverage over money, payments, and credit, shielding the national economy from excessive foreign rent extraction. Kazakhstan's future economic autonomy hinges on the balance between public digital innovation and private platform power.