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Main article: National Cryptocurrencies (CBDC)
2024: What does digital tenge look like, where to buy it and how to spend it
In mid-May 2024, the National Bank of Kazakhstan spoke about the peculiarities of digital tenge - the third form of the national currency. It is presented in the form of tokens - digital analogues of cash tenge. At the same time, a certain face value corresponds to each token.
It is emphasized that, unlike ordinary non-cash funds, digital money can pay for goods and services without access to the Internet. At the same time, citizens can open accounts, transfer funds and perform other transactions with digital tenge through mobile applications of banks and payment systems, bank cards, NFC, as well as through QR codes and other methods. Digital tenge is an official means of payment (unlike cryptocurrencies), and its exchange rate is tied to the national currency in the ratio of 1:1. This allows you to exchange digital money without any problems.
To use digital tenge, you do not need to install additional applications. Access to wallets in digital tenge is provided through second-level banks or payment organizations. Owners of funds will be able to freely convert money in their account at any time, both from a non-cash form to a digital one, and vice versa. In addition, an exchange for cash is possible. All transactions can be carried out through the existing payment infrastructure.
Another feature of digital tenge is the ability to configure certain properties. In particular, you can specify the transaction conditions. For example, if a parent wants to label pocket funds for a child so that he cannot spend them on something harmful, you can indicate in which business objects (for example, in the school canteen) or on which goods money can be spent. In addition, such labeling will help make public procurement more transparent: the allocated funds cannot be spent on purposes that are not specified in the contract.[1]
2023
Bank cards with digital tenge began to be issued in Kazakhstan
In mid-November 2023, Kazakhstani banks began issuing debit cards with the possibility of paying digital tenge. Thus, the cards were first issued by the Eurasian Bank (together with Mastercard) and Bank CenterCredit.
 | Digital tenge is the third form of national currency in addition to cash and non-cash. It reveals the potential of blockchain technology to create innovative financial services, ensures the targeting and efficiency of public spending, and also paves a "bridge" between traditional finances and the world of digital assets. The launch that took place today launched the development of the digital tenge ecosystem and in the near future Kazakhstanis will be able to use the first products based on it, "commented Binur Zhalenov, Chairman of the National Payment Corporation of Kazakhstan, in mid-November 2023. |  |
Digital currency can be paid in the same way as by non-cash means - through Internet acquiring, mobile applications, POS terminals and even where there is no stable access to the Internet. As noted in the "CenterCredit Bank," Digital Tenge will allow more effective management of the money supply: Kazakhstanis will be able to directly and quickly receive payments from the state (pensions, scholarships, social benefits, etc.). In addition, companies will pay salaries in digital currency.
It is expected that digital tenge will become a key element of Kazakhstan's payment infrastructure by expanding access to cashless payments, transparency of government spending, optimizing cash flow and creating opportunities for innovative financial products.
Officially, the first transaction with digital tenge was held within the framework of the Congress of Financiers of Kazakhstan on November 15, 2023. The development of digital financial infrastructure will be engaged in the national payment corporation established under the Central Bank of Kazakhstan.[2]
Kazakhstan created a corporation for the development of digital tenge
On September 15, 2023, the National Bank of Kazakhstan announced the creation of the National Payment Corporation (NPK) for the development of digital tenge. According to the press service of the regulator, the NPK was formed by reorganizing the RSE "Kazakhstan Center for Interbank Settlements" (CCMP). Read more here.
Digital tenge launch
On August 14, 2023, the National Bank of the Republic of Kazakhstan announced the launch of digital tenge. According to the regulator, the goal of the project is to further develop and modernize, adapt the national payment system of the republic to new external challenges.
According to Binur Zhalenov, chairman of the Center for the Development of Payment and Financial Technologies of the National Bank, digital tenge is not intended to replace cash or non-cash money, but will be used in parallel. The introduction of digital currency will ensure the further development of the national payment system of Kazakhstan thanks to a number of unique technological characteristics, such as, in particular, the possibility of payment without the Internet.
Digital tenge, like the third form of the national currency, will be considered the same legal tender, its price will be equal to the tenge exchange rate and it can easily be exchanged for cash or non-cash funds. Binur Zhalenov is confident that digital tenge will not lead to a ban on cash turnover in the near future, and Kazakhstanis will be able to continue to use cash.
| | We stretched for several years the full introduction of digital tenge. Now in the process of selecting pilot state bodies and pilot social payments. That is, by the end of the year, Kazakhstanis will really be able to use the digital tenge when receiving certain social payments, and with participation in public procurement about those government agencies that will fall into our pilot project, - said the chairman of the National Bank Galymzhan Pyrmatov. | |
By mid-August 2023, the National Bank is conducting a comprehensive study of the advantages and risks of digital currency, its impact on monetary policy, financial stability and the payment services market.[3]
2022
Kazakhstan creates digital tenge on Binance blockchain
On October 27, 2022, it became known that the National Bank of Kazakhstan decided to integrate its digital currency (CBDC) with the BNB Chain blockchain. This was announced by Changpeng Zhao, founder and CEO of one of the largest cryptocurrency exchanges Binance.
We are talking about the use of digital tenge: this is the third form of the national currency of Kazakhstan after cash and non-cash funds. It is expected that the introduction of a new method of calculation will lead to the emergence of innovative services, as well as contribute to increasing the availability of financial services. Digital tenge technology is being developed with an emphasis on efficient and secure payments. Citizens will be able to convert digital currency into familiar cash or non-cash funds.
The National Bank of Kazakhstan began testing digital tenge in 2021. Possible options for the practical introduction of a new form of currency will be presented by the end of 2022.
At the same time, Binance in early October 2022 announced the receipt of a license from the AIFC Financial Services Regulatory Committee (AFSA) to manage the digital asset platform and provide custodial services at the Astana International Financial Center (AIFC). Binance will be able to provide services as a site operator for the digital asset platform. The exchange, in particular, will offer exchange and conversion services, storage of cryptocurrency assets and exchange trading. Registration will be available at the site for individuals and legal entities from any country.
| | Binance, with its rich experience, technologies and capabilities, will contribute to the development of the digital asset market in Kazakhstan and create a greater impetus for the further approval of the country as a cryptohab in the region, AFSA notes.[4] | |
Completion of digital tenge platform prototype development
The development of a prototype of the digital tenge platform has been completed in Kazakhstan. This was announced on February 7, 2022 by the chairman of the National Bank of Kazakhstan Galymzhan Pyrmatov at an expanded meeting of the government of the republic.
According to him, during 2022, a final decision will be developed on the model of introducing digital tenge with an assessment of benefits and costs.
At the initial stage, the viability of the concept of digital tenge was checked. He received experimental confirmation of the technological feasibility of the retail platform based on the distributed register technology, and also determined the main parameters of the Central Bank's digital currency model for Kazakhstan.
During the pilot project, basic scenarios of the digital tenge life cycle were implemented - from issue and distribution to purchases and transfers using digital currency.
According to the National Bank, the final technological solution has a number of advantages:
- Tokenization of ownership: digital tenge is stored by the user in the form of tokens in a digital wallet on his mobile device (or other medium), which allows for complete control over money.
- Payments in offline mode: users of digital tenge can make purchases in the absence of access Internet to both the client and the seller.
- Configurable anonymity: Transaction details can be hidden from all settlement participants (including at the user's choice) while enabling the necessary checks.
- Special purpose tokens: the programmability of digital tenge allows you to put restrictions on spending in the structure of the token and simplify tracking of target use.
- Ease of integration: The digital tenge infrastructure provides the opportunity to easily connect and implement its own use cases for second-tier banks and fintech companies, that is, for both traditional and new players in the financial market.[5]
2020: Development begins
In July 2020, it became known about the start of work on the creation of digital tenge in Kazakhstan. Alik Shpekbayev, chairman of the anti-corruption agency, called for accelerating the creation of a national electronic currency in order to reduce the amount of cash that is in demand from bribe-takers. In addition, such a project will ensure transparency of the movement of budget funds in public procurement, he said.
First Deputy Minister of Digital Development of Kazakhstan Bagdat Mussin agrees that the digital national currency will become an anti-corruption tool, thanks to people will "work according to the law."
| | You asked what "wow" is, what can be proposed, what will really serve as a tough barrier in the fight against corruption. I think not only the digitization of processes. For example, in public procurement, we know, the problem with cashing out. When public procurement wins, then the hug happens. This is because, in principle, we did not preemptively put digital control on him. He has already cashed in, and you only then deal with him in fact. I have an idea, there should be a digital analogue of the tenge, which is painted, - said Mussin during a briefing at an anti-corruption agency. | |
As the adviser to the Chairman of the National Bank of Kazakhstan Binur Zhalenov noted, for the country the technological solution of digital tenge is secondary, and the main thing is to ensure inflationary targeting and preservation of financial stability in the market. It is critically important that the design of the system correlates with the goals of the country's monetary policy, he stressed.
The AIFC, represented by Development Director Kairat Kaliyev, made a willingness to support approbation and the formation of regulatory and legal frameworks for the introduction of the digital currency of Kazakhstan.[6]
Notes
- ↑ "This is not Bitcoin." What does digital tenge look like, where to buy it and how to spend it
- ↑ Kazakhstan is the first in Eurasia to issue a card in the digital currency of the central bank
- ↑ Digital tenge launched in Kazakhstan
- ↑ Kazakhstan to build central bank digital currency on BNB Chain
- ↑ Kazakhstan completes development of digital tenge platform prototype
- ↑ Kazakhstan urged to accelerate the creation of digital tenge
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