Kyrgyzstan has introduced a new stablecoin, KGST, pegged one-to-one with the national currency, the Kyrgyzstani som. The launch marks a significant step as the country simultaneously confirms ongoing plans to issue a central bank digital currency (CBDC) and explore the establishment of a digital asset reserve.
The KGST stablecoin will operate on the BNB Chain blockchain. According to Changpeng “CZ” Zhao, former CEO of Binance and current strategic adviser to Kyrgyzstan’s crypto committee, Binance Coin (BNB) would be part of the cryptocurrency reserve if the project moves forward. CZ attended the second meeting of Kyrgyzstan’s National Council for the Development of Virtual Assets and Blockchain Technologies, which was held with President Sadyr Japarov on Friday. The first council session took place earlier this year, around April, coinciding with CZ’s advisory appointment.
Local news outlet KG24 reported that Kyrgyzstan’s crypto committee has been tasked with securing international exchange listings for the KGST stablecoin and presenting proposals for a national crypto reserve within the next two months. These actions highlight Kyrgyzstan’s commitment to leveraging digital asset technology to modernize its financial system.
President Japarov emphasized the Ministry of Economy and Commerce’s role in formulating robust legislative frameworks for virtual assets. Additionally, he instructed the National Bank of the Kyrgyz Republic to commence pilot testing of a digital version of the som.
The CBDC pilot program is planned in three stages. Initial efforts will focus on connecting commercial banks to facilitate seamless digital som transfers. The next phase will involve integrating the Central Treasury to manage social welfare and government disbursements through the digital currency platform. The final stage will test offline functionality and low-connectivity transaction capabilities before pursuing a nationwide rollout.
The National Bank has stated that after successful pilot completion, the digital som platform will be scaled for comprehensive national adoption. Previously, in April, the bank indicated it would delay any final decision on CBDC issuance until late 2026.
Globally, over 100 countries are exploring CBDC initiatives, but only a few have implemented live systems, including the Bahamas’ Sand Dollar, Nigeria’s e-Naira, and Jamaica’s JAM-DEX, according to data from cbdctracker.org.
In parallel to technical deployment, Kyrgyzstan is also prioritizing education to support its digital economy ambitions. President Japarov encouraged the Ministry of Science, Higher Education, and Innovation to propose strategies for advancing digital financial literacy and training experts in blockchain and artificial intelligence sectors.
Binance’s educational division, Binance Academy, will collaborate with ten of Kyrgyzstan’s leading universities to foster knowledge growth in the space. CZ confirmed plans for full localization of the Binance app across the country to enhance accessibility and user experience.
The timing of these announcements coincides with CZ receiving a pardon from former U.S. President Donald Trump on Wednesday related to anti-money laundering allegations during his tenure as Binance CEO.
