Kazakhstan is pioneering the use of its central bank digital currency （CBDC） to fund the construction of a rail line to China, marking a significant step in the country’s digital currency adoption.
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- Kazakhstan is using its CBDC, the digital tenge, for a rail line project to China.
- The project aims to ensure efficient and transparent use of funds.
- This pilot project is part of the second phase of the digital tenge rollout.
- The project involves major entities like JSC Samruk-Kazyna and JSC National Company Kazakhstan Temir Zholy.
- The success of this pilot could expand the digital tenge’s use to other state projects.
Kazakhstan has embarked on a significant initiative by utilizing its central bank digital currency （CBDC）, the digital tenge, to fund the construction of a rail line to China. This move represents a crucial step in the country’s adoption of digital currency technology and aims to ensure the efficient and transparent use of funds.
The National Bank of Kazakhstan has launched this pilot project as the second phase in the rollout of the digital tenge. The programmable digital tenge is being used to build a section of the Dostyk-Moiynty railway, a strategic infrastructure project that underscores the potential of digital currencies in public spending.
The bank has emphasized that the digital tenge allows for “efficient spending and better control over funds.” During the pilot launch, funds allocated for the project were marked on the digital tenge platform, ensuring they are only paid to organizations that fulfill all necessary obligations. This includes the entire supply chain, so all suppliers and contractors receive their due payments.
This innovative use of digital currency technology is expected to reduce the risks of fund misappropriation and ensure transparency and efficiency in public spending. The pilot project involves several major entities, including JSC Samruk-Kazyna, JSC National Company Kazakhstan Temir Zholy, JSC Kazpost, and JSC Halyk Bank of Kazakhstan.
Following the success of this pilot, the National Bank of Kazakhstan plans to expand the use of the digital tenge platform to include more market participants and other state-funded projects in sectors such as agriculture and construction. This expansion will involve integrating additional reference sources and information systems for marking the digital tenge.
The bank, alongside the government and the Anti-Corruption Agency of Kazakhstan, is implementing several pilot projects to demonstrate the benefits of the digital tenge. The results of the second phase of the digital tenge introduction will be presented in a final report at the end of 2024.