On the global digital finance scene, Kazakhstan emerges as an innovator. On November 15, a landmark transaction was carried out in Almaty, the country's capital. Binur Zhalenov, president of the National Payments Corporation of Kazakhstan, headlined the event, using the central bank's digital currency (CBDC), Tenge Digital, for the first time. This symbolic step ushers in a new era of digital payments in the country.
The transaction, an everyday purchase, was made with a debit card linked to a CBDC account. This pioneering interaction symbolizes the integration of the new digital currency with existing payment infrastructures. Tenge Digital, as highlighted by Zhalenov, is compatible with widely recognized international payment systems such as Visa and Mastercard. Additionally, the new currency's global reach is reinforced by its compatibility with digital wallet services such as Apple Pay and Samsung Pay.
The launch of Digital Tenge in Kazakhstan's retail market is not only a milestone for the country, but also indicative of the growing trend towards digitalization of national currencies. Digital currency goes beyond the traditional concept of money, offering advanced functionalities such as the ability to execute smart contracts and transfer digital assets. Digital Tenge is expected to begin being used in international trade transactions by 2025, significant progress since its initial development in February 2023 and the creation of the NPC in September to lead this digital transformation.
As Kazakhstan moves forward with CBDC implementation, it is also seeing firmer control over the cryptocurrency market in the country. Recent restrictions have limited access to foreign cryptocurrency exchanges such as Coinbase and Kraken to those without a local license. Furthermore, cryptocurrency miners face new challenges with the imposition of additional tax rates, leading to a legal challenge.
This development is a significant sign of Kazakhstan's approach to regulating digital finance and cryptocurrencies, balancing innovation with regulatory control.