Kyrgyzstan has launched a new stablecoin pegged 1:1 to the national currency, the som, marking its latest step toward broader crypto adoption.
Key Takeaways:
Kyrgyzstan launched its first national stablecoin, KGST, pegged 1:1 to the som and built on the BNB Chain. Former Binance CEO CZ attended the launch and confirmed plans for a future national crypto reserve and a CBDC pilot. The National Bank will test the digital som in three phases before deciding on a full rollout by 2026.The government also confirmed plans to pilot a central bank digital currency (CBDC) and establish a national crypto reserve.
CZ Joins Kyrgyz President as Nation Launches BNB Chain-Based Stablecoin KGST
The new stablecoin, KGST, operates on the BNB Chain, with BNB itself likely to be part of the future crypto reserve, according to former Binance CEO Changpeng “CZ” Zhao.
Zhao joined Kyrgyz President Sadyr Japarov on Friday during the second meeting of the National Council for the Development of Virtual Assets and Blockchain Technologies.
He has served as a strategic adviser to the country’s crypto committee since April.
Local outlet KG24 reported that Kyrgyzstan’s crypto committee has been tasked with ensuring KGST’s listing on international exchanges and submitting concrete proposals for a national crypto reserve within two months.
The move is part of a larger effort to leverage blockchain and digital assets to modernize the financial system, attract foreign investment, and promote transparency in government and banking operations.
The National Bank of the Kyrgyz Republic confirmed it will conduct a three-phase pilot of the digital som, building on its earlier demo with Build Block TECH.
The pilot will begin by linking commercial banks for interbank transfers, followed by integration with the Central Treasury for government and social payments.
The final stage will test offline and low-connectivity transactions before a national rollout.
“After successfully piloting all three phases, the platform will be rolled out nationally and scaled,” the central bank said.
Despite its progress, the bank reiterated that it will decide whether to issue a CBDC only after completing evaluations by 2026.
More than 100 countries are currently exploring CBDCs, but only three, the Bahamas’ Sand Dollar, Nigeria’s e-Naira, and Jamaica’s JAM-DEX, are live, according to CBDCTracker.org.
Focus on Education and Innovation
President Japarov also directed the Ministry of Science and Higher Education to develop digital financial literacy programs and train blockchain and AI specialists.
CZ announced that Binance Academy will partner with 10 leading Kyrgyz universities and fully localize the Binance app in the country.
The announcement came days after Donald Trump pardoned CZ, who had faced charges related to anti-money laundering violations during his time as Binance CEO.
Zhao pleaded guilty to money laundering violations at the crypto exchange back in 2023.
Binance agreed to pay over $4 billion in forfeiture, while Zhao was ordered to pay $50 million in fines in order to resolve the landmark crypto case.
The Binance founder also agreed to step down from his role as Binance CEO, though this week’s presidential pardon may open the doors for him to return to the position.
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