The National Bank of Kazakhstan on Wednesday kicked off a central bank digital currency (CBDC) pilot, with one official marking the occasion by making the first retail payment using the digital tenge.
The central bank conducted the first issue of the digital tenge on a platform launched in "pilot mode," but with real users in the form of second-tier banks and their clients, according to an official announcement.
The CBDC platform is powered by technology that underlies crypto, with the pilot testing automated and blockchain-based smart contracts for settlements. Participating banks have issued digital vouchers and cards to facilitate transfers.
Wednesday also marked the publication of findings from a project exploring the issuance of a digital tenge in Kazakhstan, and a central bank official reportedly demonstrated the first payment with the CBDC.
Global financial institutions have repeatedly called on countries to set up legislation and conduct research into the issuance of national digital currencies. Kristalina Georgieva, the head of the International Monetary Fund (IMF), said Wednesday that CBDCs can replace cash and offer financial resilience to economies. But major economies have so far shied away from making a decision on issuance.
Kazakhstan has been prepping for a CBDC since at least 2021.
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"It is planned to complete the full implementation of the digital tenge by the end of 2025 by expanding its services, usage scenarios and the environment of platform participants," the announcement said.
