Kyrgyzstan is ending its national USDKG stablecoin project, while South Korea proposes tighter transfer controls and Thailand prepares to open its domestic crypto ETF market. These Asia crypto regulatory updates, reported on October 11, 2026, combine shutdowns and compliance requirements with institutional settlement tests and stablecoin partnerships.
Key takeaways
- Kyrgyzstan ordered the liquidation of USDKG’s issuer and Coin Nomad Exchange.
- Dubai requires reserves covering all VASP customer liabilities.
- Thailand’s first crypto ETFs will hold only Bitcoin or Ethereum.
According to Wu Blockchain, Kyrgyzstan instructed its Ministry of Finance to liquidate EVA, USDKG’s issuer, and Coin Nomad Exchange, the country’s first state-owned cryptocurrency exchange. The other developments cover transfer registration, mining electricity access, tokenization and sanctions compliance.
Kyrgyzstan ends its national stablecoin project
Kyrgyzstan’s shutdown aims to optimize state-owned asset management, officials said. USDKG launched in November 2025, with approximately 50 million tokens intended mainly for cross-border settlements.
The United Kingdom sanctioned the issuer in May 2026 on suspicion of supporting Russia through economically significant business activities. Holders can redeem USDKG for fiat currency or USDT.
Cross-border oversight in Asia’s crypto regulatory updates
South Korea’s proposed amendments would require virtual asset transfer operators to register before operating. The Ministry of Economy and Finance opened consultation on October 7, 2026, on changes to the Enforcement Decree of the Foreign Exchange Transactions Act.
The scope includes custody, management and intermediary transfers between South Korea and overseas, plus relevant transfers between domestic VASPs and personal wallets. Operators would need computerized facilities and at least two professional staff. Records would pass through the Bank of Korea’s foreign exchange network and could reach tax, customs, financial supervision and financial intelligence agencies.
Russia restricts mining grid connections
Russia permits cryptocurrency mining facilities to seek grid connections only under Class 4 power-supply reliability, making them subject to priority disconnection during shortages or deteriorating operating conditions. The category dates to February 2026.
The rule also covers previously submitted but incomplete applications. The Ministry of Energy said it aims to prevent mining-related power shortages and improve use of existing grid infrastructure.
China plans national computing and blockchain networks
China’s CPC Central Committee and State Council issued policy opinions calling for integrated national computing power and blockchain networks. The document also includes manufacturing digitalization, “East Data, West Computing,” smart manufacturing and industrial internet projects.
It calls for improved data property rights, transactions and benefit distribution, alongside data-element pilots. Other priorities include “AI Plus,” embodied AI, quantum technology, brain-computer interfaces and patient capital for early-stage hard-tech investment.
Japan validates cross-chain settlement
Nine Japanese institutions completed Phase 2 of Project Trinity, testing synchronized delivery-versus-payment settlement across chains. Participants included Sumitomo Mitsui Banking Corporation, Daiwa Securities, SBI Securities, Progmat and Datachain.
Daiwa and SBI Securities simulated Osaka Digital Exchange’s START market. Two settlements paired SBI VC Trade’s ST corporate bonds with Sumitomo Mitsui Banking Corporation’s trust-type stablecoins, validating a T+2 settlement cycle at this stage.
Dubai requires full reserve coverage
Dubai’s Virtual Assets Regulatory Authority requires VASPs to maintain 100% coverage of customer liabilities throughout the audit review period. Its October 6, 2026, circular requires matching assets at a 1:1 ratio and daily reconciliation.
Independent audits must cover hot, warm and cold wallets, third-party infrastructure and custodians. Reviews also examine asset segregation, wallet control and rehypothecation or lending.
Authorities advance stablecoin and tokenization cooperation
According to the official HKMA statement, the Hong Kong Monetary Authority and Bank Negara Malaysia will establish a joint policy-focused workstream to promote compliant cross-border stablecoin use cases, while Asia’s weekly TOP10 crypto news describes a policy-level working group for the same purpose. They also plan closer tokenization exchanges, stronger real-time settlement links and exploration of connectivity between Hong Kong’s CMU and Malaysia’s RENTAS securities depository.
Tether separately signed a memorandum with Kazakhstan’s National Bank and Almaty City Administration to explore stablecoins, tokenization and DeFi. Work includes a Kazakh tenge-pegged stablecoin concept, possible use of Hadron and an Almaty pilot.
Thailand sets crypto ETF requirements
Thailand’s SEC issued 11 rules on October 8, 2026, effective October 16, 2026. Initially, ETFs can invest only in Bitcoin or Ethereum, trade domestically, follow passive strategies and maintain annual average exposure of at least 80% to one crypto asset.
Regulated custodians must hold assets. Mutual and private equity funds can invest, but securities firms cannot finance purchases. Retail access to overseas crypto ETFs through Thai brokers remains temporarily prohibited.
Binance report identifies Iranian-linked accounts
The Wall Street Journal reported that an April 2026 Binance investigation identified 21 accounts linked to US-sanctioned financier Babak Zanjani, with approximately $850 million in transactions. Binance said it blocked and liquidated associated sanctions-violating accounts, disputing any equation of total volume with Revolutionary Guard funding.
The report, requested by the UAE Financial Intelligence Unit, traced at least $67 million from two accounts to wallets identified as linked to Iran’s Islamic Revolutionary Guard Corps.
Article produced with the assistance of artificial intelligence and reviewed by the editorial team.