Kyrgyzstan is rapidly working to build a state-backed crypto economy and is rapidly becoming the Switzerland of cryptocurrencies.
The government has already issued two stablecoins, built a national treasury, and welcomed former Binance CEO Qiao Changpeng into the policy world.
One of the stablecoins, USDKG, is backed by physical gold purchased by the Kyrgyzstan Ministry of Finance. The government has reportedly allocated about $100 million to purchase gold reserves for the project. Recently, USDKG was also listed on Hong Kong-based digital asset platform OSL, increasing access to regulated crypto infrastructure across one of Asia’s largest financial hubs.
The second token, KGST, is linked to the Kyrgyz Som and runs on the BNB Smart Chain through a partnership with Binance. The country is also in the process of introducing Digital Som, a central bank digital currency. Retailers are expected to accept this product starting in 2027.
President Sadyr Japarov has made cryptocurrencies an immediate national priority. Under local law, only Kyrgyz citizens can serve as presidential advisors. Mr. Zhao currently holds a Kyrgyzstan passport and works as an unpaid advisor on digital asset policy, according to domestic industry sources.
His reported involvement comes as Kyrgyzstan seeks to position itself as a regional hub for tokenized real-world assets, gold-backed products, crypto payments, and cross-border payments infrastructure.
Cryptocurrency trading volume now exceeds national GDP
Their number is huge compared to the size of the economy. In 2025, virtual currency sales by licensed operators will reach $20.5 billion to $32 billion.
Kyrgyzstan’s GDP is approximately $14 billion. According to official data, more than 2.73 trillion soums of cryptocurrency transactions have been made in more than 2.1 million operations.
The country jumped from 76th to 19th in Chainalysis’ global cryptocurrency adoption rankings within a year. Currently, more than 200 virtual currency exchanges and exchange operators are registered in the country, and there are also 11 licensed mining companies.
Crypto-related tax revenues amounted to approximately $22.8 million in 2025, exceeding the taxes collected from Dordoi Bazaar, one of Central Asia’s largest trading markets.
Kyrgyzstan bets on “crypto-Switzerland” model
Kyrgyzstan openly positions itself as a neutral custodial and payment hub. The government recently built a large gold storage facility with a capacity that far exceeds the country’s reserves.
Officials believe the vault could eventually store foreign exchange reserves and support tokenized gold products issued within Kyrgyzstan. Interestingly, domestic industry insiders liken the project to a local “Fort Knox.”
Officials believe that geopolitical changes have weakened Switzerland’s image as a politically neutral storage center. Kyrgyzstan sees this as a breakthrough. The pitch to crypto companies includes reduced regulation, cheaper licenses, access to banks and state support.
Industry executives claim that a cryptocurrency license in Dubai can cost more than $1 million a year. In Kyrgyzstan, the cost is reportedly several tenths of that.
Related: Changpeng Zhao rejects claims he proposed crypto bank for Kyrgyzstan
