Binance‘s CEO Changpeng Zhao announced that Kazakhstan would start testing its Central Bank Digital Currency (CBDC) Digital Tenge on the BNB Chain (BNB).
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. (4/4)
— CZ ? Binance (@cz_binance) October 26, 2022
After Binance acquired its license from Kazakhstan, it immediately knocked on the doors of Kazakhstan’s financial watchdogs, according to Zhao.
The Binance team met with the First Deputy of the Governor of the National Bank of Kazakhstan (NKB) and the Head of the Payment and Technological Center to introduce the BNB Chain. Kazakhstan already tested its CBDC with real data in a controlled environment, and now it will deploy its prototype onto BNB Chain.
Binance in Kazakhstan
The deployment of the Kazakh CBDC is not the first collaboration between Kazakhstan and Binance. In the first quarter of the year, Zhao visited the country to meet its President, First Deputy Chief of Staff of the President, and Minister of Digital Development, Innovations, and Aerospace Industry. Kazakhstan was one of Zhao’s stops in his agenda to expand Binance’s growth.
In May, the exchange signed a memorandum of understanding with the Kazakhstan Ministry of Digital Development, Innovations, and Aerospace Industry, which documented that Binance would lend a hand to Kazakhstan in creating and launching cryptocurrency regulations.
Commenting on the memorandum, Zhao said:
“Kazakhstan is one of the world leaders in the crypto mining industry. The country was one of the first in the world to introduce the legalization of mining. We believe that, in full cooperation with the local authorities, Binance can make a great contribution to the development of the local crypto community and blockchain ecosystem in Kazakhstan.”
Kazakhstan’s change of heart
At the time of the memorandum, Kazakhstan was indeed one of the most mining-friendly nations in the world. However, that changed drastically in July.
The President of Kazakhstan signed a bill on July 11 to apply taxation on crypto mining. The country had signaled that it would halt mining operations due to its energy crisis before. With the new tax bill, the government imposed a differentiated tax rate which starts at 1 tenge per KWh and increases based on the consumed energy.