The Cabinet of Ministers is planning to open crypto banks in Kyrgyzstan

On 31 October 2024, the Ministry of Economy and Commerce submitted for public discussion the draft law on amendments and additions to some legislative acts in the virtual assets, initiated by the Cabinet of Ministers. 

According to the draft law, relevant amendments and additions are made to the laws ‘On Virtual Assets’ and ‘On Banks and Banking Activities’, as follows:

• Cryptobank will operate based on a crypto banking licence of the National Bank of the Kyrgyz Republic.
• The concepts of ‘crypto bank’, ‘crypto banking activities’ and ‘crypto banking operations’ and ‘crypto crediting’ are being introduced into the country's legislation.

The justification note states that with the introduction of crypto banking, the volume of transactions in cryptocurrencies is expected to increase, which in turn will increase tax revenues, new jobs are expected to be created in the field of financial technology, which will strengthen the country's reputation as one of the centres of finance innovation.

The justification note does not contain any economic calculations. According to the Financial Stability Board, the market capitalisation of global crypto assets was estimated at $1.2 trillion at the end of 2023, excluding stablecoins, valued at $125 billion at the end of the second quarter of 2023.

In line with the joint International Monetary Fund and Financial Stability Board publication on cryptoasset policy dated 7 September 2023, significant risks associated with cryptoassets are noted and recommendations are provided. Final recommendations on regulation, supervision and oversight of crypto-assets and crypto-markets are scheduled for 2025.