Kazakhstan's Digital Tenge: Triumph in Pilot, Gears for 2024 Enhancements
Kazakhstan's successful pilot of digital tenge is set for significant business, regulatory, and technical improvements in 2024, bolstering its global CBDC position.
The digital tenge, which represents Kazakhstan's pioneering venture into central bank digital currencies (CBDCs), has completed its pilot project, which lasted for a month. This groundbreaking endeavor into digitizing the national currency, which represents a huge shift in the landscape of Kazakhstan's financial technology systems, is an important milestone. The accomplishment of the project serves as a guiding light leading to the possibility of future developments in applications using digital money.
As a testing field for a variety of applications of the digital tenge, the pilot program served as a testing ground. The local Onay card, which was originally developed for payments to the public transportation system, was used for a variety of purposes, including the provision of free meals to kids in Almaty, as well as more complicated financial activities. One of the most important roles that the Kazpost postal system performed in these transactions was that of an intermediary. In addition, four local banks produced plastic cards in collaboration with global payment giants Visa and Mastercard. These cards enabled customers to make purchases both online and in person, as well as withdraw cash from ATMs. This capability went beyond the boundaries of Kazakhstan, demonstrating the digital currency's capacity to be used in a broad variety of contexts.
A further test with the digital tenge includes its use in international payments via SWIFT and the issue of CBDC-backed stablecoins on platforms like as Binance and KASE. Further experiments were also conducted with the digital tenge. In addition, the pilot investigated the domains of gold tokenization and the use of smart contracts for tax collection. Additionally, a move-to-earn application was put through its paces. The digital tenge has a wide range of applications, which demonstrates its adaptability and potential to revolutionize Kazakhstan's financial environment.
With an eye toward the future, the National Bank of Kazakhstan and the National Payment Corporation of Kazakhstan (NPCK) have devised lofty objectives for the year 2024. The expansion of the network of intermediate banks, the improvement of decentralized finance apps, and the facilitation of offline transactions will be the primary focus of their efforts to promote financial inclusion, particularly in regions with poor internet availability. In addition, participation in initiatives involving international payment systems will be a primary priority. Additionally, to correspond with their regulatory and legislative goals, they will emphasize the enhancement of the digital tenge's processing speed as well as its security. The further integration of the digital tenge into global financial systems and the enhancement of its functioning are both anticipated to be facilitated by these improvements.
Amid these technical advancements, the Chief Executive Officer of NPCK, Binur Zhalenov, confirmed that the digital tenge will not be used for the purpose of user monitoring, therefore resolving any possible worries over privacy. It is clear from this statement that Kazakhstan is dedicated to ensuring that its digital currency efforts continue to preserve the confidence and safety of its users.
Image source: Shutterstock
