The National Bank of Kazakhstan has introduced a pilot project of a stablecoin named Evo (KZTE), whose price will be tied to the country’s national currency, the tenge. The test is being conducted within the bank’s Digital Assets Regulatory Sandbox. It is not an isolated endeavor but part and parcel of a very large, concerted effort for the transition of the country’s economy.

The economy of Kazakhstan has been historically dependent on mining and energy industries. The government, led by President Kassym-Jomart Tokayev, is actively pursuing a policy of digitalization to decrease the economy’s reliance on these industries and make it more contemporary. Kazakhstan desires to transform into a regional leader and a “digital nexus” of Central Asia.

Being a central bank, the role of the National Bank is to provide the regulatory framework for the stablecoin. By taking an active role in its issuance and piloting within the Digital Assets Regulatory Sandbox, the bank is making a bold and visionary move. It is anticipated that it will create a progressive and regulated environment for digital assets, which will further attract foreign investment and tech talent. Investments like the Astana International Financial Centre (AIFC) and the “Digital Silk Way” project are intended to position the country as an efficient center for startups and technology companies.

The majority of Kazakhstan’s people live in rural settlements with very low internet penetration and hence inadequate access to conventional banking services. Digital financial instruments like the Digital Tenge and Evo stablecoin can make financial inclusion a reality by facilitating cashless payment and services even for low-internet settlements.

The project uses the Solana blockchain technology. Solana was chosen because of its low cost and high speed of transactions, which are the two main characteristics of a digital currency for quick and efficient payments. It is highly efficient because of its new Proof of History (PoH) consensus algorithm. In contrast to other blockchains which achieve network-wide consensus on the order of transactions, PoH creates an auditable, tamper-proof record of events that is a neutral, decentralized clock. This cryptographic confirmation allows nodes to confirm transactions at high speeds without needing to communicate with each other, which leads to remarkable throughput.

The project is built on a foundation of considered public-private partnerships:

• Mastercard will act as an intermediary for Evo (KZTE) integration into global payments networks. Through the partnership, the stablecoin will be cross-pollinated with mainstream payment networks, readying it for payments at scale. Mastercard’s Multi-Token Network (MTN) is likely at the focal point of this, a private blockchain network that can host different types of digital assets—like stablecoins—in a secure, regulation-friendly setting. This allows Evo to be readily incorporated into Mastercard’s existing payment ecosystem, delivering an enterprise-proven solution to consumers and businesses alike.
• A local cryptocurrency exchange and member of the domestic regulatory sandbox, Intebix is also a co-issuer of the stablecoin. The collaboration introduces much-needed experience from the crypto space to the project, ensuring the technical and operational side of the stablecoin is sound.
• Eurasian Bank, a local commercial bank, is also a co-issuer. The participation of a conventional bank is at the heart of incorporating the stablecoin with the existing financial infrastructure, particularly in the administration of the tenge reserves underlying Evo.

It is not an isolated project. It is part of an overarching, coordinated effort that includes:

• The Digital Tenge (CBDC) pilot program: This is a separate but complementary program. Unlike a private digital currency like Evo, which is pegged to the national currency and is a stablecoin, the Digital Tenge is a Central Bank Digital Currency—a digital form of central bank money. Its pilot has already undergone intense testing and usage and is bound for use in use cases like programmable payments and public expenditure transparency. For example, it is being used for additional purposes like payment for school lunches and tracking infrastructure funds to prevent their embezzlement.
• Recommendations for a state fund for crypto assets: The government will create a strategic crypto reserve, perhaps in assets like Bitcoin, to diversify the national reserves and transform the country into a modern, technologically advanced nation.
•  Launch of “crypto cards”: The cards allow the users to link authorized cryptocurrency wallets to traditional payment systems so that the users can pay in stores using digital currencies and merchants receive tenge.
• Launch of a pilot zone of “CryptoCity” and also a special economic zone based on blockchain with Solana. Alatau is also set to feature a “CryptoCity” in which cryptocurrencies are used to pay for everyday transactions and purchases, with the town serving as a real-time laboratory for a blockchain economy. This will be complemented by the “Digital Silk Way,” an initiative to establish a high-speed fiber-optic data corridor across Eurasia, which embodies the country’s ambitions to build the physical and digital infrastructure to make it a global technology hub.

In brief, Kazakhstan’s runaway speed is a strategic inflection point to understand. It is using a combination of public-private partnerships, a new regulatory policy, and a master national strategy to remake its economy, attract investment, and become a world leader in the digital economy.