Kazakhstan Launches CBDC, Digital Tenge
Kazakhstan unveiled its central bank digital currency (CBDC), called the digital tenge, on November 15th, marking the beginning of operations in a “limited environment with real users.” The National Bank of Kazakhstan started the pilot phase in cooperation with second-tier banks and their clientele.
Since 2021, plans for Kazakhstan’s CBDC have been in the works, but it wasn’t until February that development began in earnest.
Kazakhstan Makes First Retail Transaction Using CBDC
Binur Zhalenov, Chairman of Kazakhstan’s National Payment Corporation (NPC), conducted the first retail transaction using the digital tenge via a debit card connected to the CBDC account, achieving a significant milestone.
Kazakhstan has enlisted Visa and Mastercard to facilitate the integration of digital tenge on cards. Speaking at the XI Congress of Finance in Almaty on November 25th, Zhalenov expressed optimism about future development and more innovative services.
Zhalenov emphasized the digital tenge’s adaptability for smart contracts, financial services, and digital asset transactions. The future focus of CBDC development includes enabling offline payments in 2024 and integrating cross-border trade by 2025.
The complete rollout of the digital tenge is projected to conclude by the end of 2025, with expanded services, application scenarios, and increased involvement of platform participants.
Global Coinbase Developments
Multiple countries are preparing to launch digitized versions of their legal tenders, with research noting that the value in CBDC payments is expected to reach $213 billion annually by 2030, up from just $100 million in 2023.
According to a study by Juniper Research, 92% of the total value transacted via CBDCs is anticipated to be paid domestically by 2030, compared to nearly 100% during the pilot phases in 2023.
The central bank digital currency (CBDC) issued by Banco Central do Brasil is expected to be introduced in 2024 to improve financial services in the country.
Digital Euro is scheduled to be finalized by the end of 2025. The ECB Governing Council recently confirmed that the project has moved to the preparation stage after concluding a 2-year research phase.
Earlier in November, the National Bank of Georgia (NBG) announced that it had selected blockchain company Ripple as its official technology partner for the Digital Lari (GEL) pilot project.
Hot Take: The Future of CBDCs
Kazakhstan’s launch of the digital tenge marks an important step in the adoption of CBDCs worldwide. The country’s efforts reflect a global trend as nations continue to develop their digital currencies. With extensive future plans to integrate CBDCs into various aspects of the economy, including offline payments and cross-border trade, the value and convenience of these digital assets are set to increase. As more countries follow suit with their own CBDC initiatives, the future looks promising for digital currencies.
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