Kyrgyzstan has taken a significant step towards embracing the digital asset industry by advancing a bill to create a state cryptocurrency reserve. The bill, which aims to support the wider digital asset industry, was passed by Kyrgyz lawmakers in three readings at once, officially establishing terms such as “state crypto reserve” and “state mining.”
The bill, presented by Economy and Commerce Minister Bakyt Sydykov, outlines a legal framework for several aspects of cryptocurrency adoption in Kyrgyzstan. This includes the issuance and circulation of stablecoins, tokenized real-world assets (RWAs), and state-run industry operations. Sydykov explained that the establishment of a crypto reserve would enable the state to accumulate assets in cryptographic form through crypto mining, tokenization of real-world assets, and the issuance of stablecoins backed by fiat currency.
According to Sydykov, the state crypto reserve is intended to enhance Kyrgyzstan’s financial stability by diversifying its accumulation instruments. He addressed concerns regarding energy supply by stating that the government would not be exempt from established mining rates. He clarified that a separate tariff for mining exists, and mining activities would not be permitted at the Kambar-Ata-1 thermal power plant, as the plant’s primary purpose is not mining.
The draft bill is currently awaiting the signature of President Sadyr Japarov, who recently signed a law on a central bank digital currency (CBDC). The bill specifies that Kyrgyzstan’s crypto reserve would not be limited to pure crypto assets such as Bitcoin but would instead comprise a mix of digital assets owned by the state.
The bill defines a state cryptocurrency reserve as “a set of virtual assets owned by the state and formed through their mining, issuance, tokenization and acquisition.” The procedures for the formation, storage, management, and use of the cryptocurrency reserve will be determined by the President of the Kyrgyz Republic.
Kyrgyzstan’s initiative to establish a state crypto asset reserve aligns with similar explorations in neighboring Kazakhstan. President Kassym-Jomart Tokayev of Kazakhstan recently urged the government to prioritize the development of crypto and AI within the country, including the potential creation of a strategic crypto reserve.
