Kazakhstan starts CBDC pilot project with Binance support

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Key takeaways:

  • Due to the controlled environment in which consumers and businesses utilize the money, the CBDC project in the Central Asian nation was completed on schedule.
  • The research recommended additional risk reduction strategies as well as potential modifications to the legal framework.

A report released by the National Bank of Kazakhstan (NBK) and Binance on February 3 states that the bank has started a pilot project for the digital tenge. The paper concentrated on worldwide approaches to regulating digital assets, specifically in Central Asia and the Commonwealth of Independent States.

The report’s introduction by NBK Deputy Governor Berik Sholpankupov discussed the bank’s goal of a partnership between Traditional Finance and DeFi that might broaden financial inclusion and promote global trade. He added:

“In Kazakhstan, we also started a practical R&D project to explore how our CBDC – Digital Tenge, can bridge the world of crypto with traditional fiat payments infrastructure.”

Sholpankupov’s declaration attested to the NBK’s compliance with the timelines outlined in its official roadmap. In 2020, Kazakhstan revealed plans for a digital tenge. The project is anticipated to last until the end of 2025. The report added the following:

“A Digital Tenge CDBC initiative […] Is already in a pilot phase using the controlled environment, real consumers and merchants. Currently, BNB Chain and NBK are testing CBDC integration with the [BNB] public decentralised blockchain to bridge the gap even further between traditional banking and crypto ecosystem.”

In October 2022, Binance received a permanent license from Kazakhstan’s Astana Financial Services Authority (AFSA) to oversee a platform for digital assets and offer custody services. Later that month, the NBK announced that the CBDC would be integrated into the Binance BNB network in 2022.

The nation is progressing in adopting digital technologies, with many companies and people embracing electronic payment systems and e-commerce platforms.

The ASFA released a consultation document on January 27 that examines the issues with the 2018-created Digital Asset Trading Facility (DATF) regulatory framework at the Astana International Financial Center. Additional risk reduction strategies and prospective regulatory framework modifications were recommended in that report.

Although much work needs to be done, the Kazakhstani digital currency initiative has the potential to alter the nation’s financial system significantly. But with Binance and the National Bank of Kazakhstan’s backing, the project is well-positioned to succeed and act as a guide for other nations interested in deploying digital currencies.

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