Central-Asia Country Kazakhstan has officially launched the digital tenge project, a central bank digital currency (CBDC) designed to simplify payments and drive economic growth.
According to a local news outlet report on November 15, Binur Zhalenov, CEO of the Kazakhstan National Bank’s National Payment Corporation (NPC), conducted the first-ever digital tenge transaction at the 11th Congress of Financiers in Almaty.
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Zhalenov explained that the new CBDC represents Kazakhstan’s third official fiat option, complementing its physical cash and non-cash solutions. He also revealed that the nation collaborated with Visa and Mastercard, as well as local banks, to integrate the CBDC into existing payment cards.
Residents can now seamlessly use the new CBDC for global transactions through Apple Pay, Samsung Pay, and other supported options. According to the CEO, the initial phase of the digital solution will focus on retail circulation, followed by extensive development in the coming year.
The digital currency is pegged to the same value and legal status as the Kazakhstan Tenge (KZT), the official fiat currency of the Central Asian nation. It will operate on a blockchain or centralized ledger, providing electronic transactions, instant settlements, and potential improvements in the country’s monetary policy.
Responding to potential concerns about safety, Zhalenov stated that the CBDC is secured by the obligations of the state represented by the National Bank. This guarantees the safety of residents’ funds and businesses.
He also emphasized the global accessibility of the digital tenge, indicating that it can be cashed worldwide through regular automatic teller machines (ATMs).
60% of Kazakhstan Citizens Are Ready to Use Digital Tenge
In 2021, President Kassym-Jomart Tokayev of Kazakhstan endorsed the idea of introducing a digital version of the national currency through an initiated pilot project.
This project took the form of an Interbank Payment Card System for processing card transactions and the Instant Payment System for servicing mobile online payments.
The pilot project served as a crucial testing ground to evaluate the feasibility of conducting various popular financial transactions using digital tenge.
The development of these prototypes was completed in February 2022. This was followed by a November 2022 economic survey to assess financial stability risks with the introduction of the digital tenge.
Of the three thousand citizens who participated in the survey, 60% expressed their desire and readiness to use the digital tender to process day-to-day transactions.
With the CBDC now live, the National Bank hopes more consumers, merchants, and businesses will incorporate the new payment solution.