Crypto Regulations in Kyrgyzstan
The Law of the Kyrgyz Republic “on Virtual assets” dated January 21, 2022 No. 12 came into force in the country. The purpose of the Law is to regulate relations arising from the turnover of virtual assets, i.e., their creation, issue, storage, and circulation.
Blockchain, virtual assets, virtual asset wallet, miner, mining, mining equipment, industrial mining, virtual asset trading operator crypto exchange digital token, virtual asset issuer, and other concepts are introduced in the law.
Source: F-Chain
Cryptocurrencies and other virtual assets are increasingly spreading in Kyrgyzstan, the nation’s central bank recently noted. The regulator reminded that using them to buy or sell goods and services is still against the law, with the Kyrgyzstani som remaining the only legal tender in the country.
Quoted by local media, the monetary authority also issued a warning regarding the risks linked to decentralized digital currencies. “No one, as a rule, is liable for cryptocurrency. It does not have financial support. It has no real value due to the fact that it is not tied to any currency or other asset,” it said.
Source: News Bitcoin
In August 2021, the government introduced a national crypto framework for crypto exchanges, giving them legal status in the country. However, there are no laws to regulate the circulation of cryptocurrencies and there is only the draft law “on the turnover of cryptocurrencies,” suggested by the National Bank.
The Kyrgyz government started working towards regulating the crypto mining industry as early as 2020, however, the growing energy crisis aided by illegal crypto mining led to several crackdowns last year. Most of the pro-crypto mining nations, including Kazakhstan and Iran, had faced similar energy crises due to illegal crypto mining.
Source: Cointelegraph
The law applies to activities in the sphere of circulation of virtual assets in the territory of the Kyrgyz Republic. Being a new type of activity in the Kyrgyz market, there are no special requirements related to virtual assets under the tax legislation of Kyrgyzstan.
It is not applicable to activities in the fields of securities, currencies, electronic money, reserves, contributions, and gambling activities as determined by the banking legislation of the Kyrgyz Republic.
A virtual asset is a digitized intangible asset that is an expression of value and a means of certifying property rights and is created, stored, and circulated using distributed ledger technology or similar technology and is not a monetary unit, means of payment, and security in the territory of the Kyrgyz Republic.
Source: f-chain
Cryptocurrencies and other virtual assets are increasingly spreading in Kyrgyzstan, the nation’s central bank recently noted. The regulator reminded that using them to buy or sell goods and services is still against the law, with the Kyrgyzstani som remaining the only legal tender in the country.
Quoted by local media, the monetary authority also issued a warning regarding the risks linked to decentralized digital currencies. “No one, as a rule, is liable for cryptocurrency. It does not have financial support. It has no real value due to the fact that it is not tied to any currency or other asset,” it said.
Source: News Bitcoin
The taxation of crypto-related businesses should be carried out the same way as the foreign exchange brokerages, the National Bank wrote.
The regulator also says participants of the cryptocurrency market must make transactions with crypto “in good faith and on their own risk,” learn how the cryptocurrencies of their choice function, and abide by Kyrgyzstan’s laws.
The regulator further underscores that it has no responsibility for the situation when cryptocurrencies lose their value and won’t compensate such losses to crypto investors.
The draft bills have yet to be introduced to Kyrgyzstan’s parliament for discussion.
Source: CoinDesk
The taxation of digital services, specifically those sales supplied by non-resident businesses, has gathered pace in Central Asia in recent years. With this introduction, Kyrgyzstan is the latest Central Asia jurisdiction to change its tax rules as they seek additional sources of revenue. Others to do so include its neighbors Uzbekistan (where VAT-related rules are live since January 1, 2020); Tajikistan (VAT rules live since January 1, 2021), and Kazakhstan where new VAT rules also come into effect on January 1, 2022.
It should be noted that Kyrgyzstan is taking a different direction with its plans for an e-commerce tax on digital services. It is, for example, more so a type of Digital Services Tax (DST), at a rate of 2%.
The Kyrgyzstan government gathered feedback on the new tax rules via a public consultation. The effective date of January 1, 2022, means it is a tight compliance window for non-resident businesses. Originally, there was to be a transition period but this was removed from the final draft of Kyrgyzstan’s new e-commerce tax rules.
Source: Vertexinc
Kyrgyzstan has regulated the crypto exchanges and the mining industry, however, there are no laws governing the circulation of cryptocurrencies in the country.
Source: Cointelegraph
Kyrgyzstan is seeking to regulate digital currency exchanges. The country’s Finance Ministry has developed draft regulations for the sector, stating that this will foster innovation and lead to the growth of a digital economy.
Kyrgyzstan’s cabinet is concerned about digital currency exchanges, local outlet 24. kg reports. As such, the State Service for Regulation and Supervision of Financial Markets (Gosfinnadzor) has prepared draft regulations to govern the sector. The agency, which is under the Ministry of Finance, believes that the regulations will not only foster innovation but also help the Asian country advance its digital economy.
Source: Coingeek
Karim also called on Kyrgyzstan to develop its own central bank digital currency (CBDC). The legislator wants the National Bank of the Kyrgyz Republic to take the lead in its development, with support from the government.
The country has not made any significant moves towards developing a digital som, even as some of its neighbors have moved quite fast in their pursuit of CBDCs. One of its immediate neighbors, China, is a global leader on this front, and of all the big economies, its CBDC is the most advanced. China’s central bank has been conducting several pilots in major cities to test the viability of its digital yuan. It has even brought in banks, online retailers, and even local outlets to these pilots.
While it has yet to make any CBDC move, Kyrgyzstan has been looking to regulate the digital currency industry, proposing new regulations for exchanges in August last year. It has also become a block reward mining hub, which has unfortunately also brought about several illegal operations. In November last year, the Kyrgyz government shut down nearly 2,500 such illegal miners.
Source: Coingeek
Not Available
Law enforcement authorities in Kyrgyzstan have confiscated thousands of crypto mining machines as part of a new offensive against illegal cryptocurrency mining in the country. Investigators have also identified industrial enterprises that have been supplying the bitcoin farms with electricity.
The State Committee for National Security (GKNB), Kyrgyzstan’s organized crime-fighting agency, has recently found and raided a number of facilities mining cryptocurrency outside the law. The special operation has been conducted in the capital Bishkek and Chuy Oblast, the country’s northernmost region.
During the offensive against illegal mining activities, law enforcement agents seized around 2,000 cryptocurrency mining units, GKNB announced, quoted by Sputnik Kyrgyzstan. Pretrial proceedings are underway, the agency’s press service added.
Source: News Bitcoin
Now the National Bank of the Kyrgyz Republic (NBKR) is considering the regulation on the regulatory sandbox. It should simplify the development of new products: it will be possible to test them on a small number of users on the basis of a temporary NBKR resolution. I think this is a step forward.
Source: Bulletins
The National Bank of Kyrgyzstan has published draft legislation that would legally define cryptocurrency and how it may be used in the Central Asian nation.
With the proposed legislation, the central bank is following the call of the Financial Action Task Force (FATF) to regulate cryptocurrencies and prevent related money laundering and terrorism financing risks, according to an explanatory note.
With Kyrgyz citizens becoming increasingly interested in cryptocurrencies, and the technology gaining traction in electronic commerce worldwide, it’s important to mitigate the risks associated with crypto, the National Bank wrote.
Source: Coindesk
