The National Bank of the Kyrgyz Republic (the country’s central bank) is working on a bill that will regulate the cryptocurrency industry in the country.
According to an official announcement posted on the regulator’s website on November 13, the National Bank of the Kyrgyz Republic is drafting a bill that will regulate cryptocurrency exchanges. During the work on the draft law, the bank will consult with representatives of the industry.
According to the regulator’s plan, the bill will regulate the sale and purchase of cryptocurrencies in order to combat fraudulent schemes and financial crimes, as well as to protect the rights of consumers and investors. The law should have a positive impact on the development of digital financial products and create favourable conditions for the cryptocurrency business. The introduction of a special tax regime for everything related to digital assets is also not excluded.
Kyrgyzstan is one of the few countries in Central Asia, where a lot of people are involved in Forex trading. Not only people are trading Forex, but crypto has become a very popular instrument. If we take a glance at cTrader brokers to trade with, a lot of them are gradually incorporating crypto as a way of trading and this news can certainly have a result on trading.
The National Bank of Kyrgyzstan does not expect that the task of regulating cryptocurrencies will be easy, stating that the cross-border nature of many private cryptocurrencies will make it difficult to apply the law without the proper infrastructure to monitor the purchase and sale of digital assets.
In addition, the bank noted that it does not know what it will have to deal with. The submitted document says that “due to the lack of regulation and chaotic cryptocurrency market, there are no statistics on the number of business entities to be regulated.” Nevertheless, clear cryptocurrency legislation will provide greater certainty for cryptocurrency-related businesses and will attract investments without significant impact on the state budget.
All interested parties can put forward their proposals by November 27. On December 4, all offers will be published on the official website of the National Bank.
The connection between Kyrgyzstan and crypto industry
Cryptocurrency, as well as the digital economy, is a new phenomenon for the Kyrgyz market. However, many experts already say that this is the future for such an economy.
Kyrgyzstan until now has remained far from the topic of cryptocurrency and blockchain. But now there are opportunities in which the republic can enter the era of the digital economy.
The expert also noted that in addition to the financial sphere, blockchain technology can be used in various fields and industries. In addition, such technology has a number of advantages over traditional financial institutions.
For example, when using cryptocurrency, the commission is almost zero. Transactions are often free. Usually, the commission is charged for transfers either very large sums, it is associated with the load on the network, or with very small amounts. Such transactions or transfers work around the clock as opposed to, for example, most banks. Also, a very important advantage of cryptocurrencies is that transfers are made instantly when banks transfer between accounts can take up to 5 days. This is only part of all the advantages that cryptocurrency can provide. Also do not forget about security, full control of money, the ability to work with smart contracts and smart signature.
Unlike Bitcoin, there are more stable cryptocurrencies that do not have sharp jumps. Such money develops smoothly. For example, Bitcoin had cases where on the day of rise or fall could reach the level of 1000 dollars. But there is also a stable currency. For example, USDT is a U.S. dollar token, and USDT is equivalent to the dollar. It’s the electronic equivalent of a dollar. There is a so-called security token that is tied to specific assets. It could be gold, oil, everything that’s traded on commodity exchanges. Also, for example, there are securities, such as shares of any company. These shares can be transferred to a digital asset so that world markets can safely bid.
The introduction of such technologies to the Kyrgyz market can not only make life easier for ordinary citizens but also improve the economic condition of the republic, as well as demonstrate to the world the country’s readiness to follow world trends.