At the 11th Congress of Financiers in Almaty, Binur Zhalenov, CEO of the National Bank’s National Payment Corporation, Kazakhstan, made history by conducting the inaugural digital Tenge transaction.
The digital Tenge marks the nation’s inaugural CBDC project propelling its journey into the digital financial revolution.
The digital tenge, positioned as Kazakhstan’s third official currency alongside physical cash and non-cash forms, offers offline transaction convenience similar to physical currency.
The CEO said that the digital currency is intended for convenient use through existing banking apps and the broader financial system.
He emphasized that the state, through the National bank, guarantees the currency’s safety, assuring the protection of personal and business funds denominated in the national currency.
Numerous countries are actively pursuing Central Bank Digital Currencies (CBDCs) as a modern digital currency option. The International Monetary Fund (IMF) has endorsed these initiatives, asserting that CBDCs offer a more cost-effective means of exchanging value and can overcome challenges in cross-border transactions between nations.
Journey to digital Tenge
The digital Tenge project was initiated in 2021 with three phases, and the completion date is pegged at the end of 2025. Key milestones of the digital Tenge Pilot Project in 2021 included the launch of a prototype platform, testing scenarios with external participants, and presenting preliminary results at the IX Congress of Financiers.
In 2022, the National Bank continued studying the benefits and costs of implementing the Digital Tenge, expanding the platform’s functionality, and conducting quantitative economic research.
The Digital Tenge Hub collaborative platform was launched to involve stakeholders in studying the national Digital Currency’s implementation.
The Decision-Making Framework for Digital Tenge development in 2022 incorporated international recommendations and approaches. Economic modeling results indicated no risks to monetary policy, financial stability, or the economy.
Successful tests with real consumers and merchants, along with positive survey responses, showcased the potential adoption of the Digital Tenge.
In 2023, the Digital Tenge initiative shifted towards a “general-purpose” CBDC, exploring wholesale applications, securities settlement, stablecoin-related initiatives, and cross-border payments.
The results obtained from the study of the project, which received backing from the nation’s president in 2021, will be made public in the final report of the year 2023, scheduled for release in December.
The purpose of disclosing these results is to use the information to evaluate and choose the most favorable architectural trade-offs. These trade-offs will then guide the development of the target architecture for digital Tenge.
