Binance, the largest crypto exchange in the world, has announced the test launch of a stablecoin (a cryptocurrency pegged to a certain fiat currency) secured by the digital tenge which was launched by the National Bank of Kazakhstan yesterday, according to a press release issued by the platform.
The rate of the new stablecoin is pegged to the digital tenge with a ratio of 1:1. According to Binance, it has developed a verification mechanism that allows investors to ensure that the value of the stablecoin is always the same as the value of the digital tenge. In turn, this also means that the cryptocurrency is equal to the regular tenge either in cash or non-cash form. The mechanism is called proof of collateral and is based on the programming technology of the digital tenge.
«Trust and transparency are the key elements for wide-spread usage and recognition of this stablecoin. When we were issuing our stablecoin we wanted to show a model of stablecoin that can reduce risks for all parties using the digital tenge and provide transparency based on the mechanism of proof of collateral in real-time,» the platform said in a statement.
During the pilot project, the crypto exchange is going to examine key risks associated with issuing the stablecoin secured by the digital tenge and identify the roles and responsibilities of interested parties. The National Bank is expected to use the results it will obtain once the pilot project is over to develop scenarios for testing the consistency of different platforms.
During the November 15 Congress of Financiers of Kazakhstan, the National Bank presented its Digital Tenge project and announced the test launch of the currency into retail turnover. Four commercial banks (Halyk Bank, Bank CenterCredit, Altyn Bank and Eurasian Bank) as well as the international payment system Visa have joined the pilot project. These banks are expected to issue debit cards pegged to customers’ e-wallets. The cards will work as usual, while accounts for the digital tenge will be opened directly in the National Bank.
The Digital Tenge project was launched in 2021. According to its participants, the digital tenge is going to be the third form of the national currency in addition to cash and non-cash money. The Kazakhstan Interbank Settlement Center (KISC) is the operator of the digital tenge.
«In fact, this is smart money that can be used in smart contracts, innovative financial services, safe settlement with digital assets, etc. We aren’t intending to compete for end-users with market participants. This is why the currency will be primarily available through banking apps and the infrastructure of financial market participants. The DT is secured by the National Bank on behalf of state liabilities, which guarantees the soundness of people’s and businesses’ money,» Binur Zhalenov, head of the KISC, underlined.
In March, Zhaslan Madiyev, head of Binance in Kazakhstan, said that the digital tenge initiative is «the most advanced in the Central Bank Digital Currency (CBDC) market.»
