Kyrgyzstan launches KGST stablecoin, pilots digital som CBDC

Kyrgyzstan announced this week that it has launched a national stablecoin and is preparing to roll out a central bank digital currency for public-sector use, officials and the country’s crypto adviser said after meetings in the capital, Bishkek. The moves, disclosed by Changpeng Zhao, the former CEO of Binance who serves as an adviser to the government, position the Central Asian nation among the first to deploy both a state-backed stablecoin and a ready-to-roll central bank digital currency, or CBDC.

Zhao said the new national stablecoin, named KGST, has been issued on the BNB Chain and is pegged one to one to the Kyrgyz som. He also said the digital som, the country’s CBDC, is now legally recognized and will begin pilot testing for government-related payments. Kyrgyz authorities have established a national cryptocurrency reserve that includes Binance Coin, or BNB, Zhao added.

Under a framework adopted earlier this year, an amendment to the country’s constitutional law gives the digital som legal tender if it is fully launched by the National Bank. Officials overseeing the program have outlined a three-stage pilot for the CBDC. The first stage will connect commercial banks to...