Kyrgyzstan’s Parliament has recently passed a groundbreaking new law focused on virtual assets, aiming to bring more structure and oversight to the world of digital tokens. The bill, which was approved in three readings at once, introduces a licensing system and defines new types of digital tokens such as stablecoins and RWA tokens.
One of the key initiatives outlined in the law is the establishment of a government crypto reserve and the implementation of state-backed crypto mining using state resources and infrastructure. This move gives the president more authority over virtual assets, including their issuance, circulation, and regulation. Additionally, the law introduces regulatory sandboxes, providing a safe space for testing new crypto services and technologies before wider implementation.
In terms of regulation and compliance, the bill clearly outlines the roles of various government bodies in overseeing the crypto sector. One authority will be responsible for licensing virtual asset service providers, while another will focus on compliance measures to prevent money laundering and terrorist financing. The legislation also sets out specific rules for crypto mining, from registering miners to establishing equipment standards and licensing requirements for companies involved in virtual asset transactions.
The passing of this law marks a significant step towards a more organized and secure crypto system in Kyrgyzstan, especially as cryptocurrency trading continues to surge in the country. According to reports from the Kyrgyz National News Agency, exchanges handled a staggering 1 trillion soms in transactions from January to July 2025, with around 1 billion soms in taxes collected from participants in the crypto industry during this period. The Economy and Trade Minister, Bakyt Sydykov, emphasized the growing importance of the sector in the country’s economy, noting the expansion of virtual asset exchange operators, crypto exchanges, and companies engaged in industrial crypto mining.
Recently, Kyrgyzstan faced sanctions from the UK over alleged links to Russian efforts to evade sanctions. In response, President Sadyr Japarov appealed to the leaders of the US and UK, denying any involvement of Kyrgyz banks and crypto exchanges in the matter. To prevent further issues, he announced that only the state-owned Keremet Bank would handle Russian rubles and assured that the country would protect its economy while meeting international obligations.
Overall, Kyrgyzstan’s new law on virtual assets sets the stage for a more regulated and secure crypto environment, amidst a backdrop of growing interest and activity in the cryptocurrency sector within the country.