Kyrgyzstan is ending its national USDKG stablecoin project, while South Korea proposes to tighten transfer controls, and Thailand is preparing to open up its domestic crypto ETF market. These Asian crypto regulatory updates were released on October 11, 2026, covering project closures, compliance requirements, institutional settlement tests, and stablecoin cooperation.
Key Points
- Kyrgyzstan has ordered the liquidation of the issuer of USDKG and Coin Nomad Exchange.
- Dubai requires that reserve funds cover the liabilities of all VASP customers.
- Thailand's first batch of ETF holders are only allowed to hold Bitcoin or Ethereum.
According to Wu Blockchain, Kyrgyzstan has instructed the Ministry of Finance to liquidate EVA – which is the issuer of USDKG – as well as Coin Nomad Exchange, the country's first state-owned cryptocurrency exchange. Other developments include transfer registration, access to electricity for mining, tokenization, and compliance with sanctions.
Kyrgyzstan ends its national stablecoin project
The Kyrgyzstan side stated that the closure of this project is aimed at optimizing the management of state-owned assets. USDKG was launched in November 2025, with approximately 50 million tokens, mainly used for cross-border settlements.
The UK imposed sanctions on the issuer in May 2026 on the grounds of suspicion that it was supporting Russia through economically significant commercial activities. Holders can exchange USDKG for fiat currency or USDT.
Cross-border regulation in the midst of updates to Asian crypto regulations
The proposed amendment in South Korea will require virtual asset transfer operators to complete registration before conducting business. On October 7, 2026, the Korean Ministry of Strategy and Finance opened a public consultation on amendments to the "Foreign Exchange Transactions Act Enforcement Order."
The scope of application includes custody, management, and intermediary transfers between Korea and overseas, as well as related transfers between domestic VASP and individual wallets. Operators are also required to have computerized facilities and be equipped with at least two professionals. Records will be transmitted through the foreign exchange network of Korean banks and may be sent to tax authorities, customs, financial regulators, and financial intelligence agencies.
Russia restricts access of mining power grids
Russia allows cryptocurrency mines to apply for grid connection only under the conditions of Class 4 power supply reliability, which means that in times of power shortages or deteriorating operating conditions, they will face priority disconnection. This category was established in February 2026.
China Plans National Computing Power and Blockchain Networks
The Political Bureau of the Central Committee of China and the State Council have issued policy recommendations, calling for the construction of an integrated national computing power and blockchain network. The document also covers digitalization in manufacturing, the "East Data West Computing" initiative, intelligent manufacturing, and industrial internet projects.
The document proposes improvements to data property rights, transactions, and revenue distribution, as well as the advancement of pilot projects for data elements. Other key areas include "artificial intelligence+", embodied intelligence, quantum technology, brain-computer interfaces, and patient capital support for early-stage hard technology investments.
Japan verifies cross-chain settlement
Nine Japanese institutions have completed the second phase of the Trinity project, testing cross-chain synchronization, settlement, and payment processes. The participants include Sumitomo Mitsui Banking Corporation, Yamato Securities, SBI Securities, Progmat, and Datachain.
Yamato Securities and SBI Securities simulated the START market of the Osaka Digital Exchange. Two settlements paired SBI VC Trade's ST corporate bonds with Sumitomo Mitsui Bank's trust-based stablecoin, verifying the T+2 settlement cycle at this stage.
Dubai requires full reserve coverage
The Dubai Virtual Assets Regulatory Authority requires VASP to maintain 100% coverage of customer liabilities throughout the audit review period. A circular issued on October 6, 2026, stipulates that assets must be matched on a 1:1 basis and daily reconciliations must be conducted.
Independent audits must cover hot wallets, warm wallets, cold wallets, third-party infrastructure, as well as custodians. The review will also focus on asset isolation, wallet control, and the situation of re-pledging or lending.
Authorities promote cooperation in stablecoins and tokenization
According to an official statement from the Hong Kong Monetary Authority, the Hong Kong Monetary Authority and the Bank Negara Malaysia will establish a policy-focused joint working mechanism to promote compliant cross-border stablecoin use cases; meanwhile, Asian Weekly Crypto News reports that the two parties will also set up a policy-level working group for the same purpose. Both sides also plan to enhance tokenization exchanges, improve real-time settlement connections, and explore interconnectivity between Hong Kong's CMU and Malaysia's RENTAS securities depository systems.
Tether also signed memorandums of understanding with the National Bank of Kazakhstan and the Almaty City Government to discuss stablecoins, tokenization, and DeFi. Related work includes the concept of a Kazakhstani tenge-pegged stablecoin, the possible use of Hadron, and conducting pilots in Almaty.
Thailand sets requirements for encryption ETF
The Thai Securities and Exchange Commission issued 11 regulations on October 8, 2026, which will come into effect on October 16, 2026. In the initial phase, ETF is only allowed to invest in Bitcoin or Ethereum, and transactions can only be conducted within Thailand. A passive investment strategy must be adopted, with at least 80% of the annual average exposure allocated to a single crypto asset.
Regulated custodian institutions must hold the relevant assets. Mutual funds and private equity funds may invest, but securities companies are not allowed to provide financing for such purchases. Thai brokers' channels for retail investors to access overseas ETF cryptocurrencies are still temporarily prohibited.
Binance reports identifying accounts associated with Iran
The Wall Street Journal reported that in a survey in April 2026, Binance identified 21 accounts associated with Babak Zanjani, a financier subject to U.S. sanctions, with transaction amounts totaling approximately 850 million US dollars. Binance stated that it has blocked and liquidated the relevant accounts that violated the sanctions and refuted the claim that the total transaction volume is equivalent to financing for the Revolutionary Guard.
The report was requested by the UAE's financial intelligence agency, which traced at least $67 million from two accounts to wallets identified as being associated with Iran's Islamic Revolutionary Guard.
This article was generated with the assistance of artificial intelligence and has been reviewed by an editorial team.
