Kyrgyzstan has launched a new stablecoin, KGST, which is pegged 1:1 to the national som currency. This announcement was made by President Sadyr Japarov during a meeting with Binance founder Changpeng Zhao. This comes after Zhao’s earlier agreement with Kyrgyzstan’s National Investment Agency to enhance the country’s cryptocurrency and blockchain ecosystem.
The KGST stablecoin is designed to facilitate international settlements without the need for double conversions. This will significantly improve the ease of cross-border payments and remittances. Farkhat Iminov, head of Kyrgyzstan’s National Council for the Development of Virtual Assets and Blockchain Technologies, mentioned that KGST would later be integrated with the country’s digital som, a Central Bank Digital Currency (CBDC) under development.
Advancements in Kyrgyzstan’s Digital Currency Plans
Alongside the stablecoin, the Kyrgyz government is advancing other key initiatives. President Japarov issued decrees to improve the legal framework for digital assets and instructed the National Bank to begin pilot testing of the digital som. The CBDC pilot will unfold in three phases: connecting the National Bank to commercial banks for transfers, linking the Central Treasury for government and social payments, and testing offline payments to ensure accessibility in low-connectivity areas.
Furthermore, the government plans to establish a national cryptocurrency reserve, which may include Binance Coin (BNB) tokens. This would align with the growing volume of cryptocurrency transactions in Kyrgyzstan, which has already surpassed $10 billion in the first half of 2025, marking a 47% increase over the previous year.
Expanding the Country’s Digital Economy
The launch of KGST and the digital som is a significant step in Kyrgyzstan’s broader digital currency strategy. These initiatives aim to not only integrate Kyrgyzstan further into the global cryptocurrency space but also enhance financial services and government payment systems within the country. With support from Binance and Zhao, Kyrgyzstan is positioning itself as a leader in Central Asia’s blockchain development.
As the pilot programs for both KGST and the digital som unfold, Kyrgyzstan is setting a strong foundation for a more robust digital economy, potentially attracting international partnerships and investments in the process.