Kyrgyzstan Approves Bill to Establish State Cryptocurrency Reserve

Kyrgyzstan’s parliament has approved amendments to its legislation on virtual assets, introducing provisions that enable the government to create a national cryptocurrency reserve, issue stablecoins, and conduct state-led mining operations.

The bill, passed in three readings, sets out legal frameworks for the circulation and regulation of stablecoins and tokenised real-world assets (RWAs), as well as industry licensing systems. It will become law once signed by President Sadyr Japarov, who earlier this year granted legal status to the country’s central bank digital currency (CBDC), the digital som.

According to Economy and Commerce Minister Bakyt Sydykov, the proposed state cryptocurrency reserve will strengthen Kyrgyzstan’s financial stability by introducing new instruments of accumulation.

A crypto reserve would allow the state to accumulate its own assets in cryptographic form through crypto mining, as well as tokenisation of real-world assets and issuance of stablecoins backed by fiat currency

Economy and Commerce Minister Bakyt Sydykov

The new law also extends presidential powers over the regulation, issuance, and circulation of digital assets, including authority to define procedures for storage and use of the state reserve. One state body will oversee licensing of crypto service providers, while another will manage compliance issues such as anti-money laundering and counter-terrorist financing requirements.

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Government Mining Under Scrutiny

Parliament also approved measures for government-backed mining initiatives. These operations will be subject to existing tariffs and will not be exempt from energy regulations. Sydykov clarified that no crypto farms would operate at the country’s thermal power stations, stressing their primary purpose remains electricity generation. However, lawmakers voiced concerns about the sector’s high energy demand.

The law follows Kyrgyzstan’s growing involvement in digital finance. Sydykov recently disclosed that local exchanges handled transactions worth 1 trillion Kyrgyzstani soms (AU$17.3 billion) in the first seven months of 2025, generating tax revenue of around 1 billion soms (AU$17.3 million). He also noted that 169 operators are active in the country, including 13 licensed digital asset exchanges and 11 industrial-scale miners.

Kyrgyzstan’s move aligns with neighbouring Kazakhstan, which just launched a Strategic Bitcoin Reserve under the management of the National Bank’s investment arm as part of its wider digital finance agenda.

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