The digital tenge, the central bank digital currency of Kazakhstan (CBDC), has been declared a success after a month-long pilot project. A series of commercial, regulatory and technical improvements are expected in 2024.
During its pilot run, the digital tenge was used to provide free lunches to schoolchildren in Almaty through the local channel Onay! card, which was originally designed for use in the transit system. The postal system operator Kazpost acted as an intermediary for these transactions.
Four local banks, along with Visa and Mastercard, issued plastic cards to focus group members. The cards allowed users to make purchases in person or online and withdraw cash from ATMs. The participating merchant had the option to accept digital tenge or convert them to "cashless" tenge.
By converting tenge digital, they were integrated into existing QR and point-of-sale systems. The cards worked throughout Kazakhstan and outside of it. The report reclaimed This level of interoperability was the first for a CBDC.
Great follow up meeting with @MasterCard Senior Vice Presidents Selim Ergoz&Arn Vogels, taking advantage #AGNU78 agreements. Encouraged by efforts in the continued implementation of the DCP: open a regional center in Almaty, strengthen digital technology #tengeoffering training to SMEs and 5 other priority areas pic.twitter.com/cpviSwL7DM
โYerzhan Ashikbayev (@KZAmbUS) November 28, 2023
Other experiments conducted with the digital tenge included make cross-border payments via SWIFT and issuance of CBDC-backed stablecoins on the Binance and KASE platforms. Digital tenge were used to tokenize gold, value added tax was collected via smart contract and a motion app was tested to win.
Related: Uzbekistan allows two banks to issue crypto cards
The National Bank of Kazakhstan and the National Payments Corporation of Kazakhstan (NPCK), a body established in September to manage The national CBDC has a long list of goals for 2024. They include increasing the number of intermediary banks and continuing to develop decentralized financial applications.
The agencies hope to conduct offline transactions at scale, which would dramatically increase financial inclusion in the country as internet connectivity is limited in some regions. They will also increase participation in cross-border payment projects. Kazakhstan is an observer on the mBridge Project. They also have regulatory and legislative objectives that must be implemented simultaneously and hope to increase the security of the digital tenge and the speed of processing.
The general director of NPCK, Binur Zhalenov, assured in an interview ventilated on the eve of the report's publication that the digital tenge would not be used to monitor users.
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