Key Takeaways:
- MP Karim Khanjeza proposed that Kyrgyzstan create its own cryptocurrency and legalise it.
- “Nothing grows as quickly as cryptocurrencies,” he stated at a meeting of the parliamentary committee on law and order, criminal justice, and corruption. MPs debated proposed changes to the law in the area of virtual assets.
Tolkunbek Abdygulov, the head of Kyrgyzstan’s National Bank, indicated on January 17, 2018, that the bank had no plans to stifle the expansion of the cryptocurrency market in the country. He pointed out that banning something that the Central Bank does not issue is difficult, and that citizens of Kyrgyzstan who invest in cryptocurrencies do so at their own risk. The Central Bank reportedly declared in October 2017 that it has no plans to enact any restrictive or limiting measures regarding cryptocurrency mining.
Kyrgyzstan has authorised cryptocurrency exchanges and mining, but there are no rules limiting cryptocurrency circulation in the country.
During a parliamentary committee hearing on law and order and combating corruption, Kyrgyz MP Karim Khanjeza urged for the legalization of Bitcoin in the country.
According to him, the capacity to conduct transactions without the involvement of a third party and the creation of options in contrast to financial instruments are the primary motivations for the creation and use of digital assets. At the same time, the crypto assets market is not often controlled by a central authority and lacks clear legal protection or monitoring systems.
Due to their principal role — trading, Zhyrgalbek Turuskulov believes that bitcoin exchanges will help to the establishment of a new industry of digital assets. It will assist in attracting billions of dollars in investment in this sector. This is what draws traders to the market, many of whom have years of experience working with traditional assets. The proposed law establishes the necessary standards and conditions for the operation of cryptocurrency exchanges on Kyrgyzstan’s territory. This would allow Kyrgyzstan to attract significant traders and safeguard Kyrgyzstan’s exit from the international cryptoasset markets, the deputy stated.
MP Khanjeza argued for the creation of a rule of law for the crypto market during his address, suggesting revisions to the draught law to include virtual assets. “Nothing is expanding as quickly as cryptocurrency,” he remarked.
He went on to say that his country is well positioned to benefit from the growing popularity of cryptocurrencies, and he offered that they develop their own national cryptocurrency. According to a local daily, he stated the government should focus on building a sovereign national digital currency that would be overseen by the National Bank.
He also pushed for the establishment of a crypto hub in the country by bringing in highly trained experts in the sector, a tactic used by the UAE to become a regional hub for the burgeoning crypto market.
Zhyrgalbek Turuskulov asserts determining the rights and responsibilities of legal entities and individuals in the field of crypto assets turnover in order to decrease the risk of digital financial asset owners and protect citizens when transacting with crypto assets, introducing not only an electronic register of miners, but also a form for licencing a service provider’s activities, and prescribing requirements for crypto assets turnover advertising. The Central Asian country has established itself as one of the most crypto-friendly countries, with tremendous development in market regulation. Bitcoin is classified as a commodity, which means it can be mined and traded under commodity regulations.
Kyrgyzstan authorities initiated a crackdown and outlawed an illegally running crypto mining farm in the country’s northern region in November 2021.
Illegal currency minting activities, according to country law enforcement officials, have wreaked havoc on the country’s electricity grid.
Due to Kyrgyzstan’s low electricity prices, crypto mining companies have been drawn to the country after cryptocurrencies were banned in China.
Because of the energy-intensive nature of crypto mining operations, the Kyrgyzstan government raised the power tariff for crypto mining firms, as well as other consumers, in early October, according to Bitcoin.com.
