Kyrgyzstan Issues Gold-Backed State Stablecoin, Names CZ Adviser

The Kyrgyz government has issued a state-owned stablecoin backed by roughly $100 million in physical gold and placed the bullion in newly built national vaults to back the token. The Ministry of Finance owns the dollar-equivalent token and allocated the funds to purchase gold for government reserves that serve as the stablecoin’s backing. The token has been connected to licensed market infrastructure to expand regulated access.

Authorities built a large secured vault facility to store the metal backing the coin. A local fintech executive described the vault as a domestic equivalent of Fort Knox. Officials estimate Kyrgyzstan’s own gold and foreign-exchange reserves would occupy less than 10% of the facility’s capacity, leaving space for third-party reserves and tokenized real-world-asset projects.

Binance founder Changpeng Zhao, known as CZ, holds a Kyrgyz passport and is serving as an unpaid presidential adviser, according to local fintech executives involved in the projects. Zhao is also a member of the country’s National Council for Virtual Assets.

The government launched a second state-backed token pegged to the national currency, the som, in partnership with Binance. That project runs under the National Agency for Virtual Assets and the National Council for Virtual Assets and is issued on BNB Smart Chain.

Officials say the vault was designed to accommodate reserves beyond Kyrgyzstan’s needs. The state plans to allow issuance of tokens backed by physical gold stored in Kyrgyz vaults, enabling foreign issuers to keep metal locally and mint digital claims against those holdings.

Regulators are preparing changes to banking law to permit banks to act as custodians for virtual assets and to integrate crypto services into consumer banking apps. Some local banks already enable customers to buy cryptocurrencies and stablecoins through mobile apps by passing client KYC and account opening to third-party partners. Several banks are developing crypto-linked cards inside a central bank sandbox.

Officials and local fintech executives say licensing and operating costs for virtual-asset service providers in Kyrgyzstan are lower than in some other financial centers, and that local banks have shown willingness to serve crypto firms. Use cases for crypto in Kyrgyzstan include investment, cross-border trade and travel, with residents using stablecoins such as USDT for payments and as a store of value when traveling or transacting in neighboring countries.

The administration of President Sadyr Japarov has been active in shaping the country’s digital-asset strategy and has engaged industry participants to establish mechanisms for crypto companies to operate and for tokenization projects to be tested in Kyrgyzstan. The national payment system Elkart is working on integration with China’s WeChat to expand regional payment connectivity.