Reviewing the Successes and Next Steps of Kazakhstan's Digital Tenge Pilot: Central Bank Analysis

The Success of Kazakhstan’s Digital Tenge

The digital tenge, Kazakhstan’s central bank digital currency (CBDC), has completed a successful pilot project. Plans for 2024 include various improvements in business, regulatory, and technical aspects.

Utilizing the Digital Tenge

During the pilot run, the digital tenge was used to provide free lunches to schoolchildren in Almaty through the local Onay! card, originally designed for transit use. The Kazpost postal system acted as the intermediary for these transactions.

Plastic cards were issued by local banks, along with Visa and Mastercard, to focus group members. These cards enabled users to make purchases online or in-person and withdraw cash from ATMs. Merchants had the choice to accept digital tenge or convert them into “non-cash” tenge.

Interoperability and Integration

The report emphasized that the digital tenge achieved a level of interoperability that is unprecedented for a CBDC. By converting digital tenge, they could be integrated into existing point-of-sale and QR systems. The cards were functional both within and outside of Kazakhstan.

Further Experiments with Digital Tenge

In addition to the successful pilot program, other experiments were conducted using the digital tenge. These included cross-border payments via SWIFT, issuance of CBDC-backed stablecoins on Binance and KASE platforms, tokenizing gold with digital tenge, collecting value-added tax using smart contracts, and testing a move-to-earn app.

Hot Take: The Future of Digital Tenge

Kazakhstan’s digital tenge has proven its potential during the successful pilot project. With plans for further improvements in place, such as enhanced business practices and regulatory frameworks, the digital tenge is set to become a significant player in the world of CBDCs. Its interoperability and integration capabilities make it a unique offering in the market. As Kazakhstan continues to explore various use cases and experiments with the digital tenge, it is clear that the country is committed to leveraging the benefits of blockchain technology and digital currencies.