Technology

Unveiling Kazakhstan’s Digital Tenge: A Pilot Success Story Paving the Way for 2024 Innovations

The Digital Tenge Completes Pilot Project: A Step Towards Kazakhstan’s Digital Currency Revolution

Kazakhstan has successfully completed its pilot project for the digital tenge, marking the country’s first foray into central bank digital currencies (CBDCs). This groundbreaking initiative to digitize the national currency is a significant milestone in Kazakhstan’s financial technology landscape, paving the way for future developments in digital money applications.

During the month-long pilot program, the digital tenge was tested in various applications. The Onay card, originally designed for public transportation payments, was utilized for purposes such as providing free meals to children in Almaty and conducting complex financial activities. The Kazpost postal system played a crucial role as an intermediary in these transactions. Additionally, four local banks collaborated with global payment giants Visa and Mastercard to issue plastic cards, enabling customers to make online and in-person purchases, as well as withdraw cash from ATMs. This demonstrated the digital currency’s versatility in diverse contexts, extending beyond the borders of Kazakhstan.

The digital tenge also underwent further testing, including its use in international payments via SWIFT and the issuance of CBDC-backed stablecoins on platforms like Binance and KASE. Experimentation was conducted in the domains of gold tokenization, smart contracts for tax collection, and a move-to-earn application. These tests showcased the wide range of applications and transformative potential of the digital tenge in Kazakhstan’s financial ecosystem.

Looking ahead, the National Bank of Kazakhstan and the National Payment Corporation of Kazakhstan (NPCK) have set ambitious objectives for 2024. They aim to expand the network of intermediary banks, enhance decentralized finance apps, and facilitate offline transactions to promote financial inclusion, especially in regions with limited internet access. Participation in international payment system initiatives will also be a top priority. Additionally, the digital tenge’s processing speed and security will be improved to align with regulatory and legislative goals. These enhancements are expected to further integrate the digital tenge into global financial systems and enhance its functionality.

Addressing concerns over privacy, Binur Zhalenov, CEO of NPCK, affirmed that the digital tenge will not be used for user monitoring. This commitment underscores Kazakhstan’s dedication to maintaining user confidence and safety in their digital currency endeavors.

Overall, the completion of the digital tenge’s pilot project marks a significant step towards Kazakhstan’s digital currency revolution. As the country continues to innovate and refine its CBDC, the potential for transformative financial applications and increased financial inclusion becomes increasingly promising.

Image source: Shutterstock

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