The government of Kyrgyzstan is moving forward with cryptocurrency adoption by introducing a national regulatory framework for crypto trading platforms.
Kyrgyzstan’s State Service for Regulation and Supervision of Financial Markets (Gosfinnadzor), a regulatory agency operating under the Ministry of Economy and Finance, has developed a draft provision for regulating crypto exchanges, local news agency 24.kg reported on Wednesday.
The newly proposed regulations reportedly aim to establish the legal status of crypto exchanges operating in Kyrgyzstan, functions, responsibilities and compliance requirements, including the necessary registration with the unified state register. The rules also require crypto exchange service providers to ensure measures to counter illicit activities like money laundering and terrorism financing.
Gosfinnadzor reportedly said that the new framework would reduce risks and assist in the development of innovative technologies and the formation of a digital economy in Kyrgyzstan. The 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, the authority noted.
The new framework is expected to grow investor awareness on crypto exchange operations as well as generate new income sources for the national budget.
Related: Former gov’t official blames crypto mining for energy crisis in Kyrgyzstan
As previously reported, Kyrgyzstan has sought to regulate the crypto industry multiple times in recent years, initiating regulations that targeted the crypto mining industry as well as cryptocurrency exchanges. In February, Kyrgyzstan’s central bank was planning to introduce a licensing regime for crypto exchanges in a move to protect local investors.