Kyrgyzstan Joins the Digital Currency Race with CZ-Backed Stablecoin

Kyrgyzstan is moving deeper into the digital economy with the launch of a new stablecoin, KGST, and plans for a central bank digital currency (CBDC).

The developments come as part of a broader national strategy to embrace blockchain innovation, supported by Binance founder Changpeng “CZ” Zhao, who serves as an adviser to the government.

The KGST stablecoin, backed 1:1 by the Kyrgyz som, will run on Binance’s BNB Chain, President Sadyr Japarov announced following a meeting of the National Council for the Development of Virtual Assets and Blockchain Technologies. The announcement follows a cooperation agreement signed in April between Zhao and Kyrgyzstan’s National Investment Agency, which outlined plans to build a digital asset ecosystem in the country.

In addition to launching KGST, Japarov directed several key initiatives aimed at strengthening Kyrgyzstan’s regulatory and technical framework for digital finance. The Economy Ministry has been tasked with drafting new legislation for virtual assets, while the National Bank will begin pilot testing a digital som, the country’s planned CBDC.

According to the National Bank, the digital som pilot will unfold in three stages: first, a limited rollout among commercial banks to enable interbank transfers; second, integration with the Central Treasury to facilitate government and social payments; and third, trials for offline and low-connectivity transactions. Once these phases are successfully completed, the system will be expanded nationwide in cooperation with blockchain firm Build Block TECH.

Kyrgyzstan is also exploring the creation of a state cryptocurrency reserve, which could include BNB tokens, Zhao revealed on X. While details remain under review, the government expects formal proposals within the next two months.

Crypto trading has been accelerating rapidly in the Central Asian republic. Farkhat Iminov, head of the Secretariat of the crypto council, reported that local exchanges processed 860 billion soms (nearly $10 billion) in trading volume during the first half of 2025, a 47% increase over all of 2024.

“KGST will simplify international settlements by removing double conversion steps and will eventually integrate with the digital som,” Iminov said. “Together, they’ll expand Kyrgyzstan’s reach in cross-border payments and remittances.”

This marks one of the most ambitious national digital currency efforts in Central Asia. It also follows a high-profile week for Zhao, who was recently pardoned by U.S. President Donald Trump, just days before the Kyrgyz government unveiled the project.

BNB, the token powering Binance’s ecosystem, rose 0.5% in the last 24 hours to $1,114, according to market data.