Kyrgyzstan’s parliament approved the legislation on digital assets on Wednesday. The bill aims to expand virtual asset regulation, introduce state cryptocurrency mining tools, and create a licensing system.
The legislation was approved in three readings at once, and new legal definitions on stablecoins and real-world asset tokens (RWA tokens) were introduced. The bill also allows the state to establish its cryptocurrency reserve to strengthen the nation’s financial stability.
Kyrgyzstan plans to establish a state crypto reserve
Kyrgyzstan will also be able to launch government mining operations using state infrastructure and resources under the new legislation. Miner registration and requirements for digital asset mining equipment will also be regulated.
According to local reports, the bill aims to expand the President’s powers to set rules for the regulation, issuance, and circulation of virtual currencies. The ruling also introduces regulatory sandboxes that will test innovative services and technologies within its limited territories.
The document revealed that one of the state’s authorized entities will regulate and issue licenses to cryptocurrency service providers. Another authority will be in charge of compliance measures such as combating money laundering and terrorist financing.
Kyrgyzstan’s new ruling comes as its Minister of Economy and Trade, Bakyt Sydykov, revealed Tuesday that the country’s turnover of cryptocurrency exchanges and exchanges reached 1 trillion soms in the first seven months of the year. He also revealed at a meeting of the Committee on Budget that approximately 1 billion soms in taxes were received from the sector during the same period.
The minister also highlighted that the country’s crypto sector continues to grow and expand every year. Sydykov noted that Kyrgyzstan currently has around 169 crypto exchange operators, including 13 digital asset exchanges and 11 registered companies involved in industrial crypto mining.
Committee members agreed after the meeting to approve the legislation on the introduction of state mining. The representative of the executive power in Bishkek also warned that large-scale crypto mining has the potential to disrupt households in residential areas due to its high energy consumption.
The country’s member of parliament, Dastan Bekeshec, revealed that the 800,000 KW required to mine one Bitcoin could power approximately 1,200 apartments in the country for a month. He highlighted that winter is coming and questioned whether introducing state mining was worth the risk.
Kyrgyzstan plans to introduce a state CBDC
President Sadyr Japarov signed legislation in April that gives Kyrgyzstan its central bank digital currency, digital som, legal status.
“The purpose of the Constitutional Law is to launch a pilot project of a prototype of a national digital currency, the ‘digital som,’ as well as to create a legal basis and its status.”
–Sadyr Japarov, President of Kyrgyzstan.
The country plans to make the final decision on whether to officially issue the currency-backed digital assets at the end of 2026. Kyrgyzstan is also expected to begin testing the digital som sometime this year.
The minister confirmed that crypto exchanges that want to work in Kyrgyzstan must have at least 1 billion soms (roughly $115,000) in proven capital from January next year. He said the initiative aims to strengthen the country’s confidence in the crypto industry and facilitate its growth.
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Source: https://www.cryptopolitan.com/kyrgyzstan-parliament-approve-crypto-bill/