Kyrgyzstan is rapidly emerging as a safe haven for decentralized finance due to its clear crypto regulations. This shift is transforming the region's approach to digital assets.
The country's crypto-friendly stance is a result of comprehensive regulatory measures implemented over recent years. Unlike neighboring countries, Kyrgyzstan has developed structured laws, fostering a predictable environment for blockchain innovation. (Source: Cointelegraph)
In 2022, the Law "On Virtual Assets" was passed, defining virtual assets and outlining their creation, issuance, and circulation. By October 2024, Kyrgyzstan had licensed 126 VASPs, the highest number in Central Asia. (Source: Cointelegraph)
The National Bank introduced guidelines allowing commercial banks to offer crypto-related services by 2023. The total turnover of licensed VASPs skyrocketed from $59 million in 2022 to $4.2 billion within the first seven months of 2024. (Source: Cointelegraph)
The State Service for Regulation and Supervision of the Financial Market oversees these policies. The country legalized crypto mining, implementing a tax based on electricity consumption at a rate of 15%. (Source: Cointelegraph)
Mining tax revenue surpassed $1 million by 2023, nearly 10 times the projected figure. Tax contributions from VASPs climbed from $832,000 in 2023 to over $1 million by mid-2024. (Source: Cointelegraph)
In 2024, Kyrgyzstan reduced the mining tax from 15% to 10%. The country maintains its commitment to general tax rules, reinforcing its support for sector growth. (Source: Cointelegraph)
One notable initiative is USDKG, a gold-collateralized dollar stablecoin supported by the Kyrgyz Ministry of Finance. USDKG offers a secure and transparent digital asset, leveraging the robust legal structure for seamless integration with local banks. (Source: Cointelegraph)
Kyrgyzstan's approach provides a roadmap for other nations, nurturing growth without relinquishing control. This strategy hints at a future where asset-backed stablecoins can become integral to the digital economy. (Source: Cointelegraph)