Kyrgyzstan Introduces New Stablecoin on BNB Chain and Plans for Future CBDC

Kyrgyzstan launches stablecoin on BNB Chain, confirms future CBDC rollout

Kyrgyzstan has launched a new stablecoin pegged 1:1 to the Kyrgyzstani som, and has confirmed its intention to introduce a central bank digital currency (CBDC) while exploring the establishment of a digital asset reserve.

Key Takeaways

Kyrgyzstan has officially launched the KGST stablecoin, which is tied to the country's fiat currency.
The stablecoin operates on the BNB Chain, with plans to potentially include BNB in future crypto reserves.
Kyrgyzstan aims to improve financial systems through stablecoins and CBDCs, enhancing payment methods and promoting investment.
The National Bank of Kyrgyzstan is preparing to pilot its digital som in a phased approach.

The KGST stablecoin will be based on the BNB Chain, and BNB (BNB) may be part of the crypto reserve if such a reserve is established. This information comes from Changpeng ‘CZ’ Zhao, the former CEO of Binance, during his attendance at the second meeting of the National Council for the Development of Virtual Assets and Blockchain Technologies alongside President Sadyr Japarov. The inaugural meeting occurred around April when CZ took on a role as a strategic advisor for Kyrgyzstan’s crypto committee.

Local news outlet KG24 reported that Kyrgyzstan’s crypto committee is tasked with ensuring that the KGST stablecoin is listed on international exchanges and is expected to submit proposals for creating a national crypto reserve in the next two months. Kyrgyzstan’s initiative reflects a growing trend toward cryptocurrency adoption at the national level, focusing on stablecoins and CBDCs to modernize payment systems, enhance financial inclusion, increase transparency, and attract foreign investment. President Japarov also encouraged the Ministry of Economy and Commerce to develop a legislative framework for virtual assets. Additionally, he urged the National Bank of the Kyrgyz Republic to begin pilot testing of the digital som.

Advancing CBDC Initiatives in Kyrgyzstan

The pilot for the digital som will unfold in three phases, building upon the National Bank’s demo of the digital som platform developed by Build Block TECH. The initial phase will connect commercial banks to facilitate transfers, followed by linking the Central Treasury for government and social payments, and finally testing transactions in offline and low-connectivity scenarios before a full national implementation.

"Upon successfully completing all three pilot stages, we plan to introduce the platform nationally and scale it up," stated Kyrgyzstan’s central bank.

Originally, the National Bank indicated in April that a decision on issuing a CBDC would be delayed until the end of 2026. According to data from cbdctracker.org, while over 100 countries have embarked on CBDC projects, only three digital currencies are currently operational: the Bahamas Sand Dollar, Nigeria’s e-Naira, and Jamaica’s JAM-DEX.

Focus on Education and Integration

In an effort to boost digital financial literacy, President Japarov has also directed the Ministry of Science, Higher Education, and Innovation to present plans for developing educational initiatives aimed at training professionals in blockchain technology and artificial intelligence. CZ mentioned that Kyrgyzstan would collaborate with Binance Academy to integrate educational resources into ten leading universities in the country and fully localize the Binance app.

Updates from Kyrgyzstan include:

Launch of the National Stablecoin on the BNB Chain
Preparations for CBDC rollout, which will cater to government-related payments
Establishment of a National Cryptocurrency Reserve, with BNB included
Education and training initiatives through Binance Academy

In related news, CZ was recently pardoned by U.S. President Donald Trump regarding anti-money laundering violations during his tenure as CEO of Binance.

Related: Trump regarding CZ pardon: "What he did is not even a crime."

Kyrgyzstan’s digital finance updates