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Following a successful month-long pilot project, Kazakhstan’s central bank digital currency (CBDC), the digital tenge, is set to undergo a series of business, regulatory, and technical enhancements in 2024. The pilot saw the digital tenge used for providing schoolchildren with free lunches in Almaty through the local Onay card, originally designed for transit system use, with transactions facilitated by the Kazpost postal system operator.
Plastic cards, issued by four local banks in collaboration with Visa and Mastercard, were provided to focus group members. These cards allowed users to make purchases in-person or online and withdraw cash from ATMs. Merchants had the flexibility to accept digital tenge or convert them to “non-cash” tenge, integrating them into existing point-of-sale and QR systems, showcasing a notable level of interoperability for a CBDC.
Additional experiments with the digital tenge included cross-border payments via SWIFT, issuance of CBDC-backed stablecoins on Binance and KASE platforms, tokenizing gold, collecting value-added tax using a smart contract, and trialing a move-to-earn app.
Looking ahead to 2024, the National Bank of Kazakhstan and the National Payment Corporation of Kazakhstan (NPCK) aim to expand the number of intermediary banks, further develop decentralized finance applications, facilitate offline transactions at scale to enhance financial inclusion, and increase participation in cross-border payment projects, including their role as an observer in Project mBridge. Regulatory and legislative goals are also on the agenda, alongside efforts to enhance digital tenge security and processing speed.
In an interview preceding the report’s release, NPCK CEO Binur Zhalenov assured that the digital tenge would not be utilized for user surveillance.
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