Kyrgyzstan's KGST Stablecoin: Transformation with CZ's Participation

Binance founder Changpeng Zhao (CZ) attended the launch meeting of Kyrgyzstan's KHST stablecoin, which is pegged to the country's own currency. Kyrgyzstan President Sadyr Japarov announced on Friday that the country's first official stablecoin, KGST, has been made available for use. This development came after discussions with CZ.

In April, Zhao signed an agreement with Kyrgyzstan’s National Investment Agency, committing to support developments in the cryptocurrency and blockchain sector. The announcement of KGST was made during the second meeting of the National Council for the Development of Virtual Assets and Blockchain Technologies. Following the meeting, President Japarov instructed the development of a legal framework for digital assets and requested proposals to be submitted within two months for the establishment of a state cryptocurrency reserve.

In this context, the Central Bank was also instructed to initiate the pilot testing process for the digital som (central bank digital currency), which will be developed separately from KGST. In the three-phase digital som pilot program, transfers will first be made between the Central Bank and commercial banks. In the second phase, a central treasury will be integrated for government payments, and in the final phase, offline payment tests will be conducted in areas with weak internet connectivity. It is planned for the digital som to be made available to the general public following the successful completion of the pilot program.

Binance Coin (BNB) will be included in Kyrgyzstan’s national cryptocurrency reserve. CZ stated that the official proposals regarding this matter are not yet finalized. The Head of the Crypto Council Secretariat Farkhat Iminov announced that they expect a total transaction volume of 860 billion som (approximately 10 billion US dollars) in the first half of 2025, representing a 47% increase compared to 2024. Iminov expressed that KGST could be used in international payments without the need for dual currency conversion and is expected to play an effective role in cross-border payments in conjunction with the digital som in the future.

Finally, the price of BNB is currently trading at $1.114, reflecting a 0.5% increase over the last 24 hours. It is important to note that these significant developments occurred immediately after CZ was pardoned by US President Donald Trump last week.