<p>Kazakhstan’s central bank digital currency (CBDC), the digital tenge, has completed a one-month pilot project, paving the way for significant advancements in business, regulation and technology in 2024.</p><h2 id="header-0">Real-world use through Onay card</h2><p>The National Bank of Kazakhstan (NBK) <a href="https://medium.com/&#64;coinness.gl/kazakhstan-launches-npc-with-cbdc-implementation-by-2025-6ef91aec336a" rel="noopener noreferrer nofollow">established</a> the National Payment Corporation (NPK) in September. NPK is a dedicated entity that’s responsible for spearheading the launch and development of the digital tenge.</p><p>At that time, the CBDC pilot phase had advanced to controlled environment use. Global exchange Binance has been actively involved with the project. It supported the pilot by way of its BNB Chain.</p><p>During the pilot phase, the digital tenge played a pivotal role in providing free school lunches to children in Almaty, Kazakhstan’s largest city. The initiative utilized the local Onay card, initially designed for the transit system and transactions were facilitated by Kazpost, the Kazakh postal system operator.</p><h2 id="header-1">Local banking partners</h2><p>NPC Chairman Binur Zhalenov <a href="https://medium.com/&#64;coinness.gl/kazakhstan-achieves-first-retail-payment-with-digital-tenge-c0ecabdf4d1d" rel="noopener noreferrer nofollow">became</a> the first person to transact using the digital tenge in November. At the time, it was revealed that Eurasian Bank was one of the local banking participants on the project.</p><p>Eurasian collaborated with Visa and Mastercard, alongside three other local banks, distributing plastic cards to focus group members. These cards empowered users to make both in-person and online purchases, with the added functionality of cash withdrawals from ATMs.</p><p>Participating merchants were given the flexibility to accept digital tenge directly or convert them into “non-cash” tenge. The converted funds seamlessly integrated into existing point-of-sale (POS) and QR systems, demonstrating interoperability within and outside Kazakhstan.</p><p>The success extended beyond local transactions, with <a href="https://medium.com/&#64;coinness.gl/hong-kong-and-kazakhstan-pilot-swifts-cbdc-solution-952d740fc9d8" rel="noopener noreferrer nofollow">further experiments</a> involving cross-border payments via SWIFT, issuance of CBDC-backed stablecoins on platforms like Binance and the Kazakhstan Stock Exchange, tokenization of gold, value-added tax collection through smart contracts and the trial of a “move-to-earn” app.</p><h2 id="header-2">New objectives</h2><p>With an eye on the upcoming year, the National Bank of Kazakhstan and the National Payment Corporation (NPC) have set ambitious objectives. Plans include expanding the network of intermediary banks and advancing decentralized finance applications. A primary focus is on enabling offline transactions on a large scale to enhance financial inclusion in regions with limited internet connectivity.</p><p>Anticipated developments also include increased participation in cross-border payment projects, such as <a href="https://www.bis.org/about/bisih/topics/cbdc/mcbdc_bridge.htm" rel="noopener noreferrer nofollow">Project mBridge</a>, an experimental multi-CBDC platform being coordinated and developed by the central bank of central banks, the Bank for International Settlements. Regulatory and legislative goals are on the agenda, alongside efforts to enhance the security and processing speed of the digital tenge.</p><p>While addressing privacy concerns, Zhalenov emphasized in interviews that the digital tenge will not be utilized for user surveillance. Previously, Zhalenov has also alluded to the versatility of the digital tenge due to its programmable nature, citing smart contracts in particular as having great potential.</p><p>The successful pilot project and the ambitious plans for 2024 position Kazakhstan’s digital tenge as a promising development in the realm of CBDCs, showcasing the central Asian nation’s positive approach to innovation and financial inclusivity.</p>

Kazakhstan sets sights on 2024 expansion amid CBDC pilot success

Table of Contents

CoinNess Global

Other articles published on Dec 19, 2023

Solana may hit $100, this presale approaching $1.4m

The UK FCA Sets To Oversee Crypto Sandbox In Jan. 8 2024

Free Lunch or Pump Scheme? Ethereum Users Beware of Richard Heart’s PLS Bot Trust Issues

Foblgate adds D’CENT and Trust as supported external wallets

What the hell are Envelop?

Crypto Insiders Expect Pullix (PLX) to Outpace Near Protocol (NEAR) and Chainlink (LINK) By 2025

Join our free newsletter for daily crypto updates!