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Kazakhstan's Digital Tenge Completes Successful Pilot, Set for Major Expansion in 2024

Algoine News
Summary:
Kazakhstan's central bank digital currency, the digital tenge, has successfully concluded its month-long pilot project with various improvements slated for 2024. The pilot featured digital tenge being used for school lunches and transactions through plastic cards issued by local banks in cooperation with Visa and Mastercard. Plans for the digital currency in 2024 include enhancing the number of intermediary banks, refining decentralized finance applications, and increasing financial inclusion via large-scale offline transactions. The country also aims to enhance participation in international payment projects and improve the digital tenge's security and transaction speed.
Kazakhstan's digital currency, the digital tenge, has successfully completed a pilot project that lasted a month, according to the country's central bank. The year 2024 will bring numerous enhancements in terms of commerce, regulatory dynamics, and technology for the digital tenge. The digital currency, during its test phase, was harnessed to deliver free lunch to school pupils in Almaty via the local Onay! card, initially developed for public transportation. Kazpost, the national post service, acted as the go-between for these transactions. Four local banks, in tandem with Visa and Mastercard, issued plastic cards to selected focus groups. The cards were usable for in-store or online shopping and ATM cash withdrawals. Merchants could choose between accepting the digital tenge or converting them into 'non-cash' tenge. The digital tenge was able to be integrated into existing POS systems and QR codes due to these conversions. The cards could be utilized nationally and internationally, marking the first time a central bank digital currency achieved such broad compatibility according to the report. The Digital Tenge was also experimented with for making international payments via SWIFT and for issuing CBDC-backed stablecoins on Binance and KASE platforms. It was employed for the tokenization of gold, VAT collection was completed using a smart contract, and a move-to-earn application was tested. Both the National Bank of Kazakhstan and the National Payment Corporation of Kazakhstan (NPCK), which was established in September to manage the national digital currency, have several objectives for 2024. This includes increasing the quantity of intermediary banks and further enhancing decentralized finance applications. The agencies aim to introduce offline transactions on a large scale, a move set to drastically increase financial inclusion across the country, particularly in areas with limited internet access. They plan to also expand participation in international payment initiatives, where Kazakhstan currently holds an observer position in the mBridge Project. In addition, they have regulatory and legislative targets that require concurrent implementation. They also aim to enhance the digital tenge's security framework and transaction speeds. NPCK's CEO, Binur Zhalenov, confirmed in a pre-report interview that individuals' digital tenge usage would not be monitored for surveillance purposes.

Published At

12/16/2023 12:35:58 AM

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