As global leaders seek to promote financial inclusivity through the introduction of central bank digital currency (CBDC), Kazakhstan has joined the list of countries eying the implementation of the digital currency. In a recent report, the Kazakhstan authority was pleased to announce the successful completion of the Digital Tenge pilot program.
The report illustrated that the Kazakhstan apex bank, in collaboration with other regulatory agencies, will proceed with another pilot test for the Digital Tenge next year.
Kazakhstan Announces Successful Completion of Digital Tenge Pilot Trials
The authority confirmed that the bank plans to engage businesses in the upcoming pilot program to improve technical features for Digital Tenge. In the previous pilot trials, the bank was involved in experimenting with the digital tenge in cross-border payments through a strategic partnership with SWIFT.
Afterward, the developers of the Kazakhstani CBDC teamed up with Binance and the Kazakhstan Stock Exchange (KASE) to experiment the digital tenge in the issuance of stablecoin tied to the digital currency. These strategic partnerships aimed to strengthen the use case of digital tenge and support the tokenization of real world assets such as gold.
The bank also used digital currency to create more value in tax collection processes. In the upcoming pilot test, the Kazakhstan authority plans to experiment with the digital tenge in offering public services.
Firstly, the bank plans to introduce the digital tenge in a sponsored school feeding program. The team behind the CBDC plans to launch the digital tenge on the Onay Card to allow the students in Almaty to receive free lunch.
Features of Digital Tenge
For years, the Onay Card offered a transit system in collaboration with the Kazpost postal system operator. After the launch of the Onay Cards, the physical cards were issued by local banks in collaboration with payment giants such as Visa and Mastercard.
The issuing of the physical cards aimed at allowing the Onay Card holders to make payments and withdraw funds from the ATMs. The Onay Card offers businesses an option to accept payments made through the digital tenge and local fiat currencies.
Also, businesses were allowed to convert the digital tenge to their preferred currencies using the QR system and point-of-sale options. After the launch of the Onay Cards, the developers embarked on an exciting journey to integrate additional features to the platform to meet the customers’ needs.
This development increased the usability of the Onay Card in Kazakhstan and in other Central Asian countries. Besides the exciting adoption of the Onay card, the Kazakhstan apex bank observed that the features on these cards blend perfectly with the CDBC needs.
Kazakhstan Seeks to Promote Financial Inclusivity
With the ongoing pilot testing for the digital tenge, the Kazakhstan government has tasked several regulatory agencies to support the implementation of the CBDC in the region. In September, the government established a new government agency, dubbed the National Payment Corporation of Kazakhstan (NPCK), to support the development of the CBDC.
The formation of the NPCK aimed to support the development of financial infrastructures that will be used in developing the digital tenge. Also, the newly launched government agency aimed to support the government in meeting its 2024 goals, such as the development of decentralized finance (DeFi) applications and increasing the number of intermediary banks.
Beyond this, multiple government agencies in Kazakhstan plan to support the digital tenge in conducting offline transactions to ensure that financial products are available to local communities with no internet access.
Primarily, the Kazakhstan government aims to support financial inclusivity in the region through collaboration with private and public entities. The government envisages that the proposed collaboration between the regulators and key industrial players will encourage Kazakhstan to participate actively in cross-border initiatives.
In an earlier report, the government of Kazakhstan unveiled its regulatory and legislative objectives that will soon be implemented. The government plans to work with the country’s central bank to integrate advanced tools on the digital tenge to enhance the security and processing speed of the digital currency.
