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Kyrgyzstan has officially made blockchain and digital finance a national priority. How do you view this move?
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Kyrgyzstan is not the only country in Central Asia to take steps towards regulatory exploration. A member of the lower house of the Kazakh parliament recently called on the government to set up a national crypto bank as a centralized platform for custody and trading of legal digital assets. Member of parliament Azat Peruashev said that the lack of a clear regulatory infrastructure has led to the growth of illegal crypto activities, with most transactions occurring outside the official regulatory system. He believes that state-led institutions will help curb tax evasion, fraud and capital outflows through unregulated platforms.
Uzbekistan has legalized crypto trading and established a national regulatory mechanism to manage the industry. Another thing to look forward to in the future is whether Kyrgyzstan will follow El Salvador and make Bitcoin a legal tender as the regulation of cryptocurrencies is established and friendly. The accelerated investment in the crypto industry and related regulatory policies by many Central Asian countries marks a change in the country's attitude towards digital infrastructure - it is no longer just a financial tool, but is also seen as a means of national governance. Blockchain technology is being incorporated into the overall planning of national modernization and geostrategy, and subsequent developments deserve further attention.
CZ will provide guidance to the Kyrgyz government on a forward-looking framework in the field of digital assets, including technical support for blockchain infrastructure and policy formulation. The cooperation will also focus on promoting talent training and accelerating the construction of an innovative environment for DeFi and Web3 technologies.
Kyrgyzstan's strategy is unique in that it focuses on licensed crypto banks. The banks will operate under a strict regulatory framework to ensure a transparent and secure system. The decision to promote the establishment of licensed crypto banks stems from a strong focus on risk control. These institutions will comply with strict regulatory requirements to ensure the security of user funds and personal data. In addition, regulatory intervention will also help combat illegal activities such as money laundering and fraud. By incorporating cryptocurrencies into the banking system, Kyrgyzstan hopes to provide modern financial services to underserved populations.
Kyrgyzstan has imposed a tax on crypto mining. The country imposes a 10% tax on electricity costs for cryptocurrency mining activities, which includes VAT and sales tax. According to the Ministry of Finance, from January to November 2024, Kyrgyzstan collected a total of 46.6 million soms, or about $537,000, from crypto mining taxes, which is close to half of the total for the whole year of 2023.
Central Asia is waking up to crypto's true potential.
National governments are embracing blockchain as strategic infrastructure.
Regulation is shifting from reactive to proactive.
Crypto is moving from the gray zone into the spotlight.
Kyrgyzstan and neighbors are laying regulatory foundations.
