Kyrgyzstan has advanced a bill to create a state cryptocurrency reserve, marking a significant step towards embracing the digital asset industry. The bill was passed by Kyrgyz lawmakers in three readings at once.
The bill, presented by Economy and Commerce Minister Bakyt Sydykov, outlines a legal framework for several aspects of cryptocurrency adoption in Kyrgyzstan, including the issuance and circulation of stablecoins, tokenized real-world assets (RWAs), and state-run industry operations. According to Sydykov, the establishment of a crypto reserve would enable the state to accumulate assets in cryptographic form through crypto mining, tokenization of real-world assets, and the issuance of stablecoins backed by fiat currency.
Sydykov explained that the state crypto reserve is intended to enhance Kyrgyzstan’s financial stability by diversifying its accumulation instruments. He addressed concerns regarding energy supply by stating that the government would not be exempt from established mining rates. A separate tariff for mining exists, and mining activities would not be permitted at the Kambar-Ata-1 thermal power plant, as the plant’s primary purpose is not mining.
The draft bill is currently awaiting the signature of President Sadyr Japarov, who recently signed a law on a central bank digital currency (CBDC). The bill specifies that Kyrgyzstan’s crypto reserve would comprise a mix of digital assets owned by the state, not limited to pure crypto assets such as Bitcoin.
The bill defines a state cryptocurrency reserve as “a set of virtual assets owned by the state and formed through their mining, issuance, tokenization and acquisition.” The procedures for the formation, storage, management, and use of the cryptocurrency reserve will be determined by the President of the Kyrgyz Republic.
Kyrgyzstan’s initiative to establish a state crypto asset reserve aligns with similar explorations in neighboring Kazakhstan. President Kassym-Jomart Tokayev of Kazakhstan recently urged the government to prioritize the development of crypto and AI within the country, including the potential creation of a strategic crypto reserve.
