Kazakhstan joins the list of countries with a Central Bank Digital Currency (CBDC). Kazakhstan’s currency, the tenge (KZT), is now in digital format! The digital tenge was launched on November 15 by the President of the National Payment Corporation (NPC). He also explained the usefulness of this currency. CBDC Kazakhstan, here we go!
Digital Tenge, Kazakhstan’s blockchain breakthrough
Interest in central bank digital currencies continues to grow in many countries. The chairman of Kazakhstan’s National Payment Corporation (NPC) has process the official launch of the country’s central bank’s digital currency. On this occasion, Binur Zhalenov made the first ever transaction with digital tenge. This transaction was made during the eleventh Congress of Finance on November 15, reports a local media.
Today, we’re going to launch digital tenge in retail circulation. The card I paid with is the world’s first debit payment card linked to a central bank’s digital currency account.Binur Zhalenov, President of Kazakhstan’s National Payment Corporation (NPC).
According to Binur Zhalenov, Kazakhstan has worked with Visa and Mastercard, as well as local banks, to integrate CBDC into plastic cards.
The development of the Central Bank of Kazakhstan’s digital currency dates back to 2021. That year, the National Bank launched a pilot project to introduce digital tenge. In February 2022, the National Bank announced the completion of the development of a prototype platform. Kazakhstan has collaborated with Binance in the development of the CBDC.
CBDC Kazakhstan: security and financial innovation
Digital Tenge integrated into public payment services
Kazakhstan’s authorities have praised the potential use of digital tenge. According to Binur Zhalenov the digital tenge integrates systems such as the social wallet, the digital family card and other systems that guarantee the proactive provision of public services. Like physical banknotes, digital tenge will also serve as a means of payment. This CBDC can be used in smart contracts, innovative financial services and secure payments with digital assets.
CBDC Kazakhstan as a state-owned financial hub for the transactions of the future
Unlike private digital currencies, digital tenge is backed by state bonds through the National Bank. Although this makes CBDC Kazakhstan a tool of state control, the president of Kazakhstan’s National Payment Corporation (NPC) sees it as an asset. Indeed, state obligations guarantee the security of citizens’ and companies’ funds stored in digital tenge.
The President of Kazakhstan’s National Payment Corporation (NPC) also outlined the development plan for digital tenge over the next few years. In 2024, the focus will be on offline payments and the digitization of government payments. To this end, the country plans to collaborate with various financial players to set up a digital tenge payment platform in 2024. By 2025, the chairman of the National Payment Corporation hopes that all market players will be using digital tenge.
Alongside the launch of the digital currency, Kazakhstan is tightening control over the crypto industry. In addition to tax pressure which is driving away crypto miners, regulatory pressure is hurting the crypto ecosystem. Very recently, Coinbase was blocked in the country in application of the cryptocurrency law. It would seem, then, that control is essential for the state to maintain control over the technological evolution that is having such an impact on financial usage. Will the CBDC Kazakhstan supplant paper money?
Are CBDCs now becoming indispensable in the new economy on the horizon with the integration of blockchain technology?
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