Kyrgyzstan Launches National Stablecoin on BNB Chain, Establishes Crypto Reserve

Kyrgyzstan has launched KGST, a national stablecoin pegged 1:1 to its currency, the som, on BNB Chain. The announcement was made on Friday during the second meeting of the National Council for the Development of Virtual Assets and Blockchain Technologies, chaired by President Sadyr Japarov.

Former Binance CEO Changpeng Zhao attended the meeting and confirmed the development on social media. “The National Stablecoin launched on BNB Chain. The CBDC is ready for rollout. Yes, both,” Zhao wrote, noting that Kyrgyzstan is simultaneously preparing a central bank digital currency for government payments.

The move positions Kyrgyzstan as one of the first nations globally to deploy both a public blockchain stablecoin and a CBDC concurrently, creating a dual digital finance infrastructure.

How KGST Works

The KGST stablecoin maintains a 1:1 peg with the Kyrgyzstani som and operates on BNB Chain. It is registered in the State Register of Digital Assets, giving it official government recognition. This differs from USDKG, a separate dollar-backed stablecoin project backed by $500 million in gold reserves that the Ministry of Finance planned for later rollout.

The stablecoin aims to facilitate both domestic and international transactions while providing citizens with a stable digital payment option. Users can hold and transfer KGST through crypto wallet applications that support BNB Chain assets.

Local outlet KG24 reported that Kyrgyzstan’s crypto committee has been tasked with securing KGST listings on international exchanges within two months. This would allow global access to the som-backed digital asset and potentially increase demand for the national currency.

National Crypto Reserve Confirmed

Kyrgyzstan announced plans to establish a national cryptocurrency reserve that will include BNB tokens. The crypto committee must submit detailed proposals for the reserve structure within two months, according to local media reports.

Zhao confirmed that BNB would be part of the reserve, stating the government is building infrastructure for long-term crypto holdings. This makes Kyrgyzstan one of the first countries to include a major cryptocurrency in its national reserves officially.

The reserve strategy aims to diversify national assets and provide exposure to digital asset appreciation. With Kyrgyzstan processing over $10 billion in crypto volume during the first half of 2025, the country has demonstrated significant blockchain activity.

For businesses exploring treasury strategies, this approach offers a case study in how governments are beginning to hold digital assets alongside traditional reserves. Companies can also buy crypto online through regulated platforms as institutional adoption grows.

CBDC Pilot in Three Phases

The National Bank of Kyrgyzstan confirmed its digital som CBDC pilot will progress through three stages. Phase one connects commercial banks to enable interbank transfers. Phase two links the Central Treasury for government and social payments. Phase three tests offline transactions before potential national rollout.

The digital som received legal tender status earlier this year after President Japarov amended the constitutional law in April. If the pilot succeeds, full deployment could occur by 2026.

Unlike the blockchain-based KGST stablecoin, the digital som operates as a centralized CBDC under direct National Bank control.

CZ as Strategic Advisor

Changpeng Zhao became a strategic advisor to Kyrgyzstan’s crypto committee in April 2025, providing guidance on blockchain policy and infrastructure development. His presence at Friday’s announcement underscores Binance’s continued influence in Central Asian digital asset policy.

The partnership extends beyond advisory services. Binance has localized its app in the Kyrgyz language and hosted a 1,000-person meetup in the capital city, Bishkek. Binance Academy signed agreements with 10 Kyrgyz universities to deliver blockchain education programs.

BNB Market Response

BNB traded around $1,128 on October 28, showing modest gains following the Kyrgyzstan announcements. The token recently hit an all-time high above $1,370 on October 13 before pulling back to current levels.

The 33rd quarterly BNB burn removed 1.44 million tokens worth approximately $1.66 billion from circulation on October 27. This deflationary mechanism, combined with growing institutional adoption, supports long-term value.

BNB Chain has seen significant activity recently, recording 26 million transactions in a single day last week. Those monitoring live crypto prices will note that BNB maintains fourth position by market capitalization with strong trading volumes.

BNB 1-month price chart showing a modest pullback after reaching an all-time high of $1,370 earlier in October 2025. Source: CoinMarketCap.

Global Context

Kyrgyzstan joins a small group of nations actively deploying stablecoins and crypto reserves. The approach differs from most countries, which focus either on CBDCs or private sector crypto adoption, but rarely both simultaneously.

Over 100 countries are researching or developing central bank digital currencies, though few have reached full deployment. In Asia, Hong Kong, China, and Singapore conduct CBDC pilots, while Kazakhstan and Uzbekistan have begun limited stablecoin trials with private partners.

The timing coincides with Zhao receiving a presidential pardon from U.S. President Donald Trump for anti-money laundering violations. His return to public events signals Binance’s continued engagement with government blockchain initiatives across Central Asia.

What This Means for Payments

Kyrgyzstan’s dual approach creates an interesting test case. The KGST stablecoin provides blockchain transparency and international accessibility, while the digital som offers government control and offline functionality.

If successful, this model could influence how other emerging economies approach digital currency deployment. Rather than choosing between decentralized stablecoins and centralized CBDCs, countries might deploy both for different use cases.

For users and businesses in the region, the infrastructure improvements could significantly enhance cross-border transactions. Lower costs and faster settlements compared to traditional banking could accelerate adoption. Businesses can also explore accepting crypto payments for business as digital infrastructure expands.

Challenges Ahead

Questions remain about implementation details. How will KGST maintain its som peg if the national currency faces volatility? What mechanisms ensure that stablecoin reserves are adequate? How will international exchanges handle a government-issued digital asset?

Privacy concerns also emerge with CBDCs. Unlike decentralized cryptocurrencies, central bank digital currencies allow governments to track transactions closely. Balancing financial innovation with civil liberties requires careful regulatory frameworks.

The success of Kyrgyzstan’s initiatives will depend partly on execution and partly on broader crypto market conditions. If digital asset adoption continues growing globally, Kyrgyzstan’s early positioning could provide advantages. If crypto faces regulatory crackdowns elsewhere, the strategy carries increased risks.