By Shelly Melancon (Switzerland)
Authorities in Kyrgyzstan have mapped out new rules that will monitor and regulate activities of crypto exchanges within the country. According to reports, the Central Asian country, through a regulatory body, State Service for Regulation and the Supervision of Financial Markets (Gosfinnadzor), drafted the provisions that will question the legality of crypto exchanges.
The proposed regulations will also determine the functions, responsibilities of crypto exchanges operating within Kyrgyzstan. Furthermore, it will oversee the compliance of these platforms on registration while also providing requirements for getting licensed by the relevant regulatory body. Obligations for introducing anti-laundering and anti-terrorism financing measures will be imposed on the exchanges.
Regulator Highlights Prospects of Proposed Law
As per Gosfinnadzor, the new legal framework is geared towards minimizing the risks associated with cryptocurrencies and creating more vistas for the growth of emerging technologies, and encouraging the transition to a digital economy in Kyrgyzstan. The regulator also added that the proposed rules will provide a level playing field which would ensure participation from all eligible investors and businesses.
By virtue of the rules, investors will understand the workings of crypto exchanges and Kyrgyzstan can also generate revenue from taxes to finance its annual budgets.
Kyrgyzstan Deliberates on Crypto Mining Regulations
This is not the first time the Central Asian country is throwing a regulatory leash around activities within the crypto space. Earlier in April, a former Kyrgyz official had lamented over the effects of crypto mining on the country’s energy sector. Kyrgyzstan is one of the countries that harbours miners, especially those who mine Bitcoin. At the time, Kyrgyzstan president, Sadyr Japarov had proposed raising electricity tariffs to address energy challenges.
Back in February, Kyrgyzstan’s apex bank embarked on a quest to license crypto exchanges as it sought to protect local investors from the risks of cryptocurrencies.
Crypto Regulations, A Global Concern
Generally, crypto regulations have been a major talking point around the globe. In fact, Asian giant China leads in this regard with a mining ban that surfaced in May and subsequent crackdowns on cryptocurrencies. China is also fighting the war against adoption of cryptocurrencies with its central bank digital currency, the e-CNY, which it began working on in 2014.
Other countries like Iran, Kazakhstan have experienced power outages, resulting from mining. Crypto mining requires a significant amount of energy. Beyond this, the environmental effects of crypto mining have also been a source of concerns. Carbon, a harmful substance, is produced during crypto mining. As such, some mining firms are already resorting to greener energy, which is more climate-friendly.
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