Kyrgyzstan's Crypto Council Approves Regulatory Framework Amid Stablecoin Challenges

On September 5, Kyrgyzstan’s National Council for the Development of Virtual Assets and Blockchain Technologies convened under the chairmanship of President Sadyr Japarov. The meeting focused on regulatory frameworks, sanctions compliance, banking integration, and the future of the nation’s flagship stablecoin project.

The council approved the liquidation of OAJ “ElPay,” the issuer of the KGST stablecoin, which was launched in late 2025 on BNB Chain. The KGST stablecoin, pegged to the Kyrgyz som, became the first stablecoin from the Commonwealth of Independent States to be listed on Binance in December 2025. Currently, over 25 entities in the Kyrgyz digital asset sector are facing sanctions.

In addition to KGST, the government is also developing the USDKG project, a gold-backed stablecoin pegged to the US dollar, issued by a state-controlled entity. Registered on October 31, 2025, USDKG had an initial issuance of approximately $50 million. The two stablecoins aim to enhance financial inclusion, facilitate domestic transactions, and enable cheaper cross-border payments.

The legal framework for crypto regulation in Kyrgyzstan dates back to the 2022 Law on Virtual Assets, which has undergone multiple amendments. The current regulations require stablecoins to be fully collateralized and registered with reserves held in licensed banks. The council also discussed establishing local banking channels for crypto operations and creating a cryptocurrency analytics platform to monitor transactions and enforce compliance.

Notably, Changpeng Zhao, the former CEO of Binance, has been serving as a presidential adviser on digital assets since 2025, contributing to the development of the nation’s crypto strategy.