Binance’s BNB Chain To Be Integrated Into CBDC Of Kazakhstan
Binance CEO Changpeng Zhao revealed that the BNB Chain will play a role in Republic of Kazakhstan’s central bank digital currency (CBDC). The central Asian country has been in the race for a CBDC since May 2021.
As the country’s central bank announced late last year, a decision on the feasibility of launching a CBDC is to be made by December 2022.
Via Twitter, “CZ” wrote that the Binance team is relentlessly pushing the global adoption of cryptocurrencies and met with the First Deputy Governor of the National Bank of Kazakhstan (NKB), Berik Sholpankulov, and the Head of the Payments and Technology Center, Binur Zhalenov, in recent weeks.
The outcome of the meeting was that the BNB Chain will be integrated into the digital tenge, the CBDC of Kazakhstan.
We introduced them to the #BNB Chain community to discuss testing integrating their CBDC (Digital Tenge) with @BNBCHAIN .
While no further details are known yet, it seems likely that the CBDC will be based on a multi-chain architecture. In fact, NKB announced in December 2021 that the CBDC is being piloted on R3’s Corda platform.
In recent months, a CBDC pilot was running in Kazakhstan in a controlled environment with real consumers and merchants. In this regard, CZ stated:
Looking forward to NBK preparing CBDC use cases to see how they could be integrated into #BNB Chain to bridge the gap between traditional banking and the crypto ecosystem.
The pilot is being tested with two of the country’s largest commercial banks, Kaspi Bank JSC and Eurasian Bank JSC.
Kazakhstan’s CBDC model is two-tiered, meaning the central bank oversees the entire system and smaller banks open digital tenge wallets where users can exchange and redeem digital tenge and make interbank transfers.
The Central Bank of Kazakhstan also said that the CBDC is not intended to replace cash or cashless payments. Therefore, the digital tenge tokens will not be recorded in banks’ balance sheets, but only in users’ digital wallets.
Binance’s Ties In Kazakhstan To Integrate BNB Chain
As CZ pointed out in his Twitter post, Binance maintains good relations with the Kazakh government and central bank. Just three weeks ago, the crypto exchange received a “permanent license” to operate a digital asset platform and provide custody services.
The license gives Binance the status of a regulated platform and authorizes the company to provide digital asset trading, fiat currency deposit and withdrawal, and custody services.
Related Reading: The Case Against CBDCs In A Capitalist Society: Banks Won’t Be Happy
In addition, Binance has also received presidential approval to develop a virtual asset marketplace in Kazakhstan. To this end, CZ and the Financial Supervisory Authority of the Republic of Kazakhstan have signed a memorandum of understanding (MOA).
According to Zhao, the agreement is part of the company’s Law Enforcement Training Program (LETP) to combat cyber crime. LETP is already installed in France, Germany, Italy, the UK, Norway, Canada, Brazil, Paraguay and Israel.
At the time of writing, BNB was trading at around $291 and was on the verge of breaking the 200-day moving average, a long-term trend indicator.