The central bank of the Kyrgyz Republic wants to provide crypto investors with the same level of protection that is already in place in traditional finance.
The National Bank of the Kyrgyz Republic, or NBKR, is reportedly planning to introduce a licensing regime for cryptocurrency exchanges in a move to protect local investors.
NBKR chairman Tolkunbek Abdygulov announced that the country’s central bank is planning to start regulating exchange operations involving cryptocurrencies like Bitcoin (BTC), local economic publication Tazabek reports Feb. 12.
Abdygulov said that the regulatory initiative aims to safeguard crypto operations in the Kyrgyz Republic and provide investor protections similar to those that are already in place for traditional finance:
“The NBKR’s objective is to create conditions for clients, for citizens of the Kyrgyz Republic. If you want to buy Bitcoin — you just go to an exchange office, pay money and get those Bitcoins guaranteed […] Today you sell soms, buy dollars — if an exchange office has a license from the NBKR, there is no risk of losing money. There is an objective to do the same for cryptocurrencies.”
Despite the NBKR’s ambitious plans to help local people safely invest in crypto, the central bank is still warning the public about the high risks of crypto investments. “If Bitcoin hit $50,000 yesterday, it could drop to $20,000 tomorrow. And then all your invested money will be burned,” Abdygulov cautioned.
After introducing a draft crypto bill in November 2020, the Kyrgyz government presented two bills, “On the Processing of Cryptocurrencies” and “On Amendments to Legislative Acts in the Field of Virtual Assets,” to public discussion in January 2021. Kyrgyz authorities expect to finalize the bills by the end of 2021, Abdygulov said.
Apart from general legislative efforts around crypto, Kyrgyzstan also sought to regulate crypto mining activities in the country. However, no associated regulation has been adopted so far, according to Abdygulov.