Kyrgyzstan liquidates KGST stablecoin issuer, approves crypto framework

At the same meeting, the government advanced the USDKG project, a gold-backed stablecoin pegged to the U.S. dollar and issued by a state-controlled entity. USDKG was registered on October 31, 2025, with an initial issuance of roughly $50 million. The council described the stablecoin as a tool for cross-border payments and international trade, distinct from KGST's domestic focus on som-denominated transactions.

Kyrgyzstan's legal framework for crypto, anchored in the 2022 Law on Virtual Assets and amended through 2025–2026, requires stablecoins to be fully collateralized and registered with reserves held in licensed banks. The council discussed establishing local banking channels for crypto operations and a new cryptocurrency analytics platform to monitor transactions and enforce sanctions.

Former Binance CEO Changpeng Zhao, who has served as a presidential adviser on digital assets since 2025, was present at the meeting. The $50 million USDKG issuance, small by global stablecoin standards, represents a significant state commitment for a country with a GDP under $12 billion.