Summary
- Kyrgyzstan announced it will issue 'KGST', a BNB Chain-based som-denominated stablecoin, in cooperation with Binance.
- The National Bank of the Kyrgyz Republic has formalized the CBDC 'digital som' project and disclosed a three-stage pilot operation plan.
- KGST is said to potentially improve international payment efficiency and could be used for overseas payments and remittances through future integration with the digital som.
Central Asian country Kyrgyzstan will issue a stablecoin pegged to its national currency, the som (Som), in cooperation with Changpeng Zhao (CZ), co-founder of Binance. At the same time, it has formalized a central bank digital currency (CBDC) project called the “digital som.”
On the 25th (local time), The Block reported that President Sadyr Japarov announced after a meeting with Binance founder Zhao that "a stablecoin 'KGST' pegged to the som will be issued on the BNB Chain at a 1:1 ratio." This move is an extension of the agreement signed in April between the State Investment Agency and Binance, and is part of cooperation to develop the cryptocurrency and blockchain industry.
After the second meeting of the "State Commission for the Development of Virtual Assets and Blockchain Technology," President Japarov ordered the Ministry of Economy to strengthen the legal framework for digital assets and to prepare a national cryptocurrency strategic reserve plan within the next two months. He also instructed the central bank to begin pilot operations of the CBDC 'digital som' separately from the stablecoin.
The central bank plans to carry out the digital som pilot in three stages. In stage 1, it will connect transfer functions between the central bank and commercial banks; in stage 2, it will link the Ministry of Finance to test social security and public payments; and in the final stage 3, it will verify offline payment and remittance functions in low-connectivity environments. The central bank stated, "If all three stages are successfully completed, it will be expanded for nationwide application."
Changpeng Zhao said, "Binance Coin (BNB) will be included in Kyrgyzstan's virtual asset reserves." However, the government added that a concrete reserve plan has not yet been officially submitted.
Farhat Iminov, Secretary of the Virtual Assets Committee, said, "In the first half of this year, Kyrgyzstan's virtual asset trading volume was 860 billion som, up 47% year-on-year." He added, "KGST will improve efficiency by eliminating double currency conversion in international payments, and is expected to be integrated with the digital som for use in overseas payments and remittances in the future."
Son Min
sonmin@bloomingbit.ioHello I’m Son Min, a journalist at BloomingBit
