The central bank of Kyrgyzstan has begun the process of consultation on new draft laws that would regulate the emerging digital currency sector for the first time.
The National Bank of the Kyrgyz Republic has presented two draft bills for consideration, “On the Processing of Cryptocurrencies” and “On amendments to legislative acts in the field of virtual assets.”
Stakeholders are permitted to share their thoughts on the proposed legislation up to February 21, when the process closes to new comments and concerns.
The legislation would give legal recognition to cryptocurrency exchanges for the first time, requiring operators to be registered entities, licensed by the central bank directly. The legislation would also introduce a host of new compliance requirements designed to prevent money laundering and terrorism financing.
The bills also look to introduce protections for consumers, with tools for law enforcement to protect against frauds and digital currency scams.
The second bill introduces the idea of “virtual assets” into domestic law for the first time, defining digital currency assets as an object of civil rights, under the country’s civil code. Services provided by digital currency exchanges are also brought within the scope of taxable services.
The publication of the draft bills follows an announcement back in November that the bank was working on plans for drawing up legislation, following a surge in domestic interest in digital currencies and blockchain technology.
It follows on from previous attempts at regulation in Kyrgyzstan, with measures introduced in August 2019 to introduce tax for block reward miners in the country. However, the government subsequently cut off electricity supply to the sector the following month, citing overconsumption of resources.
The bills will now be open to public comment before progressing on their journey to the statute books, in a move that could revitalize Kyrgyzstan’s emerging digital currency sector.