Countries around the world are trying to regulate the crypto industry and Kyrgyzstan is not an exception. The country’s government is moving forward with cryptocurrency adoption by introducing a national regulatory framework for crypto trading platforms. The State Service for Regulation and Supervision of Financial Markets (Gosfinnadzor) came up with a draft provision for regulating crypto exchanges.
Gosfinnadzor which is part of the Ministry of Economy took into account various factors. The regulations will determine the status of exchanges, their functions, responsibilities. The newly proposed regulations will take care of various other topics as well. Regulations will help to deal with illicit activities like money laundering as well as terrorism financing.
The regulator stated that the new framework would reduce risks and assist in the development of innovative technologies. It would also help to develop innovative technologies. Thanks to the new framework it would be easier to create a digital economy in the country.
Furthermore, the new rules would also help to bring about a new financial ecosystem that would include the participation of a wider range of players like qualified investors and businesses.
Gosfinnadzor made an important decision when it started working on crypto regulations. The new framework developed by the regulators is expected to grow investor awareness of crypto exchange operations. It would also generate new sources of income for the national budget.
The country’s attitude towards cryptocurrencies and the industry, in general, is confusing, to say the least. A former government official criticized the crypto mining industry in 2021. Daniyar Akmatov stated that the industry mentioned above caused the energy crisis in the country. He made that comment at a roundtable in the country’s capital Bishkek in April.
In 2019, the country’s government stopped supplying electricity to 45 mining farms. According to senior energy official, Aitmamat Nazarov 45 miners consumed 136 megawatts of electricity. Miners consumed more electricity than three regions of the country.
Five years earlier, the country explicitly banned cryptocurrencies. In 2014, the National Bank of the Kyrgyz Republic issued a statement regarding cryptocurrencies. The central bank warned that it is illegal to use Bitcoin or other cryptocurrencies as a means of payment in the Kyrgyz Republic. The National Bank of the Kyrgyz Republic also warned the citizens about Bitcoin’s lack of regulation and high levels of volatility.
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