Tether and Kazakhstan’s central bank to study a tenge stablecoin

At a glance

• Tether has signed a memorandum of understanding (MoU) with the National Bank of Kazakhstan (NBK) and the Alatau City Authority to explore stablecoins, asset tokenization and decentralised finance.
• The parties will prepare a concept and pilot proposal for a stablecoin pegged to the tenge, and plan a tokenization pilot in Alatau that could use Tether’s Hadron platform.

Tether, the issuer of the USDT stablecoin, signed the memorandum with Kazakhstan’s central bank and the authority that runs the city of Alatau, the company said on Wednesday.

Under the agreement, the three will study how stablecoins are issued in other countries, identify possible uses, and draft a concept and pilot proposal for a tenge-pegged token. A stablecoin is a token designed to hold a fixed value against a currency, backed by reserves the issuer holds. The agreement is exploratory and does not amount to a decision to issue one, CoinDesk reported.

Related: What a stablecoin is

A tokenization pilot in Alatau

The second strand is tokenization: recording ownership of assets such as bonds or property on a blockchain so they can be transferred or used as collateral digitally. The parties will pick priority asset categories, design a model and launch a pilot within Alatau’s jurisdiction, where a special legal regime is meant to attract financial technology. Hadron, Tether’s tokenization platform, is one option under consideration.

Related: Tokenized real-world assets explained

Tether and the two authorities will also run workshops and training for NBK specialists and other government agencies on stablecoin issuance, reserve management and real-world asset tokenization.

“Maintaining financial stability, transaction transparency, and robust investor protection remains the paramount priority for the National Bank,” Deputy Governor Binur Zhalenov said in the statement.

Paolo Ardoino, Tether’s chief executive, said Kazakhstan was taking a “deliberate, forward-looking approach”.

What it changes for users: nothing yet. No tenge stablecoin has been approved or scheduled, and people in Kazakhstan cannot buy or use one as a result of this agreement.

What happens next for a tenge stablecoin

The parties have not published a timetable. The next concrete step under the MoU is a concept and pilot proposal for the tenge token, which would need the central bank’s backing before any issuance.

This article is for information only and is not investment advice.