The digital tenge has been used for everything from free school lunches to tokenizing gold, and there’s more to come.
News
The digital tenge, Kazakhstan’s central bank digital currency (CBDC), has been declared a success following a month-long pilot project. A host of business, regulatory and technical improvements are lined up for it in 2024.
During its pilot run, the digital tenge was used to provide schoolchildren with free lunches in Almaty through the local Onay card, which was originally designed for use in the transit system. The Kazpost postal system operator served as the intermediary for those transactions.
Plastic cards were issued to members of focus groups by four local banks in conjunction with Visa and Mastercard. The cards allowed users to make purchases in person or online and to withdraw cash from ATMs. The participating merchant had the option of accepting digital tenge or converting them to “non-cash” tenge.
By converting digital tenge, they were integrated into existing point-of-sale and QR systems. The cards were functional throughout and outside of Kazakhstan. The report claimed this level of interoperability was a first for a CBDC.
Great follow-up meeting with @Mastercard SVPs Selim Ergoz&Arn Vogels, building upon #UNGA78 agreements. Encouraged by the efforts in the continuous DCP implementation-opening a regional hub in Almaty, bolstering the digital #tenge, offering SME training and other 5 priority areas pic.twitter.com/cpviSwL7DM
— Yerzhan Ashikbayev (@KZAmbUS) November 28, 2023
Other experiments conducted with the digital tenge included making cross-border payments via SWIFT and issuance of CBDC-backed stablecoins on the Binance and KASE platforms. Digital tenges were used for tokenizing gold, value-added tax was collected using a smart contract, and a move-to-earn app was trialed.
Related: Uzbekistan permits two banks to issue crypto cards
The National Bank of Kazakhstan and the National Payment Corporation of Kazakhstan (NPCK), a body established in September to administer the national CBDC, have a long list of goals for 2024, including increasing the number of intermediary banks and further developing decentralized finance applications.
The agencies hope to carry out offline transactions at scale, which would dramatically increase financial inclusion in the country, since internet connectivity is limited in some regions. They will also increase participation in cross-border payment projects. Kazakhstan is an observer in Project mBridge. They also have regulatory and legislative goals that need to be implemented simultaneously, and they hope to increase digital tenge security and processing speed.
NPCK CEO Binur Zhalenov gave assurances in an interview aired on the eve of the report’s release that the digital tenge would not be used for surveillance of users.
Magazine: HK game firm to buy $100M crypto for treasury, China/UAE CBDC deal: Asia Express
