- Kyrgyz government plans to license crypto exchanges in the country.
- It also aims to regulate cryptocurrency mining.
- The chairman of NBKR, Abdygulov, says the regulation will prevent fraudulent activities and help local investors secure their investments
Kyrgyzstan Government Plans to License Crypto Exchanges
The Kyrgyz Republic has planned to regulate cryptocurrency operations in the country. The news came from the National Bank of Kyrgyzstan (NBKR) on Friday when it revealed its plans to license cryptocurrency exchanges.
The chairman, Tolkunbek Abdygulov, revealed that the bank’s intent to regulate crypto transactions is to create a safe environment for local crypto investors. He said that the plan is to provide licenses for crypto exchanges to buy and sell cryptocurrencies.
Even with the surge in cryptocurrency, he cautioned investors and traders to be aware of the risks associated with crypto investments. Tolkunbek explained that the licensing is going to prevent fraudulent activities and provide some level of security.
He said further that they plan to give crypto investors some confidence in their investments. The licensing is also going to confer some level of faith on the exchanges. He also mentioned that if the exchanges are licensed, they will have no fear of losing their funds.
Crypto Regulation: Other Countries to Start Licensing Crypto Exchanges
As part of the move to protect local crypto investors, the Kyrgyz government first released a draft bill on crypto in November 2020. After that, it also proposed two bills in January 2021 for public discussion. Abdygulov expects the bill to be finalized before the year runs out.
In addition to providing a license to exchanges, the Kyrgyz government also plans to regulate crypto mining activities. So far, there has not been a stable regulatory framework put in place yet.
Despite the bank’s plan to protect crypto investors, Adygulov cautioned citizens to be aware of the risks associated with crypto investment due to its high volatility and risk. He mentioned that the price of Bitcoin could drop quickly, leading to the loss of their investment. The central bank aims to provide a similar protection level for crypto investment as it is in traditional finance.
The Kyrgyz Republic is not the only country considering crypto regulations. Many other countries are also planning to regulate crypto activities in their country, even though crypto laws are yet to have a full form. Recently, Nigeria banned institutions from engaging in crypto transactions and ordered that any accounts still transacting cryptocurrencies should be closed.
The Indian government also recently announced its plan to put a blanket ban on all cryptocurrency operations in the country. It gave holders the privilege of three to six months to liquidate their crypto holdings. In India, a significant cryptocurrency, Unocoin, said it would not continue business in the country if the crypto ban finally holds.
Likewise, the Serbian government is one of the few countries to have a crypto law already. The law will regulate all crypto transactions and also provide licenses to crypto exchanges. The Digital asset law is going to be effective from 29 June 2021.
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