Cryptocurrencies gained popularity around the world and governments are trying to adapt to the new reality. It is worth mentioning that the central bank of the Kyrgyz Republic is working on a draft law to regulate the cryptocurrency industry in the country. The cryptocurrency industry is evolving and authorities not only in Kyrgyzstan are working hard to cope with challenges.
On November 13, the National Bank of the Kyrgyz Republic made an important announcement. Interestingly, the central bank is developing a draft law that would regulate cryptocurrency exchanges in consultation with industry stakeholders.
According to the central bank, the draft law would regulate the sale and purchase of cryptocurrencies. The bank wants to tackle fraudulent cryptocurrency schemes and financial crimes. Moreover, the draft law would protect consumer and investor rights.
Cryptocurrency industry and legal aspects
Interestingly, forthcoming regulations are important for the cryptocurrency industry. Importantly, among the expected benefits, the bank mentions the improved development of digital financial products, favorable conditions for the business community. Moreover, the National Bank of the Kyrgyz Republic notes the possible introduction of a formal tax regime for digital assets.
People should take into account that, the situation is more complicated than it might appear at first glance. Importantly, the central bank also expects crypto legislation to come with its own share of obstacles. The bank mentioned the cross-border nature of many private cryptocurrencies will make it more difficult to enforce without the proper infrastructure for monitoring as well as implementation.
Notably, due to the lack of regulation and the chaotic nature of the cryptocurrency market, there is no exact data on the number of businesses that would be subject to the new law. It is worth mentioning that the bank expects firm crypto regulations to provide more certainty for crypto-related businesses. Moreover, thanks to regulations it will be easier to attract investment without a significant effect on the state budget.
People should take into account that the bank will accept proposals for the draft law until November 27. Importantly, proposals will be published on the official register by December 4.
The cryptocurrency industry continues to evolve and it is not surprising that authorities are trying to adapt to the new reality. Authorities in Kyrgyzstan should work with companies as well as experts to come up with the best solution. Moreover, Kyrgyz authorities should join forces with officials from neighboring countries to reach this goal.