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The National Bank of Kazakhstan analyzes the success of the digital Tenge pilot project and next steps

After a month-long pilot project, it was announced that the digital currency digital tenge issued by the Central Bank of Kazakhstan (CBDC) was successful. A number of technical, regulatory and commercial improvements are planned for 2024.
During the pilot project, digital tenge was used to provide free lunches to schoolchildren in Almaty through the local Approval card, initially designed for use in the transportation system. Postal system operator Kazpost mediated such transactions.
Four local banks, in partnership with Visa and Mastercard, distributed prepaid cards to group members. The cards allowed users to make purchases in person or online and withdraw cash from ATMs. Participating merchants had the option to accept digital tenge or convert them into “non-cash” tenge.

Digital tenge card. Source: Islam Yerzhan, LinkedIn

Thanks to the digital tenge transformation, it was integrated into existing sales points and QR systems. The cards worked everywhere in Kazakhstan and even outside it. The report notes that this level of interoperability An absolute innovation for CBDC. Kazakhstan’s Ambassador to the USA, Yerzhan Ashikbayev, made the following comment about X: “A great follow-up meeting with @Mastercard Senior Vice Presidents Selim Ergoz and Arn Vogels based on the #UNGA78 agreements. Encouraged by the efforts made in the continued implementation of the DCP: opening of a regional center in Almaty, consolidation of digital #tenge, support for SMEs and to provide training in the other 5 priority areas”.

Other tests with digital tenge include Cross-border payments via SWIFT and issuance of CBDC-backed stablecoins on Binance and KASE platforms. Gold tokenization, value added tax collected using smart contract and digital tenge used for application testing move to win.

Related: Uzbekistan authorized two banks to issue crypto cards

The National Bank of Kazakhstan and the National Payments Corporation of Kazakhstan (NPCK), an institution established in September and responsible for managing the country’s CBDC, have a long list of goals for 2024, including increasing the number of intermediary banks and further developing payments. Decentralized financial applications.
The agencies hope to enable offline transactions at scale, which would significantly increase financial inclusion in the country, as internet connectivity is limited in some areas. They will also increase participation in cross-border payment projects. In fact, Kazakhstan is a mBridge Project participant. Kazakhstan also has regulatory and legal goals that must be implemented simultaneously and hopes to improve the security and transaction speed of digital tenge.
In an interview published on the eve of the report’s publication, NPCK CEO Binur Zhalenov assured that digital tenge will not be used for user surveillance.

Translation by Walter Rizzo

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