Mainstream attention has continued to follow cryptocurrencies over the past few years, with several jurisdictions focusing more on regulating their native crypto industries. The latest country to get in on the trend is Kyrgyzstan, with the nation set to issue licenses to firms looking to operate in its crypto space.
Time to Regulate
Earlier today, local news source Tazabek reported that the National Bank of the Kyrgyz Republic (NBKZ), Kyrgyzstan’s central banking institutions, is looking to implement a licensing regime for crypto exchanges.
The report explained that the move is in line with a desire to protect local investors, who appear to be making the move to cryptocurrencies in increasing numbers.
Tolkunbek Abdygulov, the NBKZ’s chairman, explained that the regulations and licensing measures would be sweeping, with the agency hoping to implement the same investor protection guidelines that apply to traditional financial institutions. Speaking to the news source, he said:
“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 some, 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.”
Building a Strong Crypto Ecosystem
Although not a major market, Kyrgyzstan’s embrace of crypto regulations is a score for the industry, which struggles to integrate itself properly into financial systems.
Kyrgyzstan’s government has taken some positive steps towards regulating cryptocurrencies. Last November, an announcement from the NBKR confirmed that the agency was looking into regulating the country’s crypto industry.
Per the announcement, the NBKR’s regulatory policy will apply to crypto sales and purchases, combat illegal transactions and financial crime, and ensure proper investor protection. The central bank noted that its new regulations would improve Kyrgyzstan’s financial innovation while also promoting a safe business environment.
The central bank also published two crypto regulatory bills late last month. Titled “On the Processing of Cryptocurrencies” and “On amendments to legislative acts in the field of virtual assets,” the bills seek to recognize cryptocurrencies and their exchanges in the country.
Amongst other things, the bills outline that crypto exchanges will need to be operated by legal entities with operating licenses from the NBKR. They also contain sections related to consumer protection, illicit transactions, and enforcement mentions against fraudulent entities operating crypto exchanges.
The bills are now available for public comment and will remain so until February 21.