Simplifying Payments and Driving Economic Growth
Kazakhstan has officially launched the digital tenge project, a central bank digital currency (CBDC) designed to simplify payments and drive economic growth. This significant development was reported by a local news outlet on November 15.
“The new CBDC represents Kazakhstan’s third official fiat option, complementing its physical cash and non-cash solutions,” says Binur Zhalenov, the CEO of the Kazakhstan National Bank’s National Payment Corporation (NPC).
Zhalenov conducted the first-ever digital tenge transaction at the 11th Congress of Financiers in Almaty. He also revealed that the nation collaborated with Visa and Mastercard, as well as local banks, to integrate the CBDC into existing payment cards. This means residents can now seamlessly use the new CBDC for global transactions through Apple Pay, Samsung Pay, and other supported options.
The CEO further emphasized that the initial phase of the digital solution will focus on retail circulation, followed by extensive development in the coming year. This 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. Operating on a blockchain or centralized ledger, it provides electronic transactions, instant settlements, and potential improvements in the country’s monetary policy.
“The CBDC is secured by the obligations of the state represented by the National Bank, guaranteeing the safety of residents’ funds and businesses,” assures Zhalenov.
Additionally, Zhalenov highlighted the global accessibility of the digital tenge, stating that it can be cashed worldwide through regular automatic teller machines (ATMs).
Pilot Project and Public Reception
In 2021, President Kassym-Jomart Tokayev of Kazakhstan endorsed the idea of introducing a digital version of the national currency through a pilot project. This project involved the Interbank Payment Card System for processing card transactions and the Instant Payment System for servicing mobile online payments.
The successful completion of these prototypes in February 2022 led to an economic survey in November 2022. The survey aimed to assess financial stability risks associated with the introduction of the digital tenge. Out of the three thousand citizens who participated, an encouraging 60% expressed their desire and readiness to use the digital tender for day-to-day transactions.
Now that the CBDC is live, the National Bank hopes that more consumers, merchants, and businesses will embrace this new payment solution and experience the benefits it offers.
