Kyrgyzstan Moves Ahead with New Law to Create State Crypto Reserve

Kyrgyzstan passes law to create a state crypto reserve, supporting blockchain innovation, digital assets, stablecoins, and regulatory oversight.

Kyrgyzstan is taking a big step toward building a strong digital economy. Lawmakers in the country have passed a new bill to create a state crypto reserve. This move is also in favor of the broader development of the digital asset industry in the region.

New Kyrgyz Law Introduces State Role in Crypto and Mining

The bill, named “On Amendments to the Law of the Kyrgyz Republic on Virtual Assets” was passed in three readings during a recent session of the Parliament. This shows great support from the government towards the future of blockchain and digital assets.

Related Reading: CZ Proposes BTC, BNB for Kyrgyzstan’s National Crypto Reserve | Live Bitcoin News

The draft law was introduced by the Minister of Economy and Commerce Bakyt Sydykov. It was initiated by the Chairman of the Cabinet of Ministers. According to Sydykov, the law is designed to better regulate the state’s regulation of virtual assets and innovation.

First, the law will transfer the regulatory powers from Financial Market Regulation and Supervision Service to a new authorized body. This new body is to be selected by the President of Kyrgyzstan. It will focus on developing and overseeing policy, regulation, and licenses for digital asset service providers.

Second, the bill coins important new terms. These include “state cryptocurrency reserve” and “state mining.” These terms reflect the country’s ambition to get more involved in the digital economy as an active player.

Third, the law establishes a legal underpinning for the use of stablecoins and real-world asset tokens (RWA-tokens). These tokens will have real physical assets associated with them, contributing to stability and investor protection.

Kyrgyz Bill Supports State Crypto Reserve and Innovation

The bill is also designed to keep users and investors safe from fraud. It will only permit the issuance of secured assets, including those backed by foreign currency. This will help maintain trust in the country’s growing virtual asset market.

In addition, the law includes the launch of a regulatory sandbox. This will provide space for companies to safely test new and innovative products associated with blockchain and crypto without breaking any rules. This step is expected to accelerate the development of new financial technologies in Kyrgyzstan.

Earlier this year, in May, Binance – one of the world’s largest crypto exchanges – signed a strategic partnership with the Kyrgyz government. The agreement came at the first meeting of the Council for the Development of Digital Assets. This partnership is a signal of the high level of interest in Kyrgyzstan’s digital aspirations from across the world.

Meanwhile, Kyrgyzstan is far from alone in this effort. Neighboring Kazakhstan is also looking at a state crypto reserve. President Kassym-Jomart Tokayev has called on his government to pursue this objective. As a result of these actions, Central Asia is rapidly emerging as a major global hotbed for blockchain and crypto innovation.

In conclusion, Kyrgyzstan’s new bill emphasizes a bold step toward digital transformation. By providing a legal pathway for state crypto reserves, mining, stablecoins and secure digital assets, the country is paving the way for a modern financial future. In addition, this piece of legislation is an important milestone in the move to include crypto in the national economic planning.