The Ministry of Economy and Commerce of Kyrgyzstan has prepared a draft law «On Amendments to Certain Legislative Acts on Virtual Assets».
As the ministry explained, the document was initiated «for the purpose of introducing crypto banks in Kyrgyzstan, which, as an entrepreneurial activity, will provide one or more types of banking services related to virtual assets, based on a license.»
Upon receiving a license, a crypto bank will carry out any types of activities related to digital assets provided for by the above-mentioned law.
«Considering the rapid development of digital technologies and cryptocurrencies, creation of a crypto bank is an urgent need for the integration of crypto assets into the traditional financial system of the country. A crypto bank will ensure safe, regulated and convenient interaction of citizens and businesses with cryptocurrencies,» the background statement says.
The necessity of introduction of a crypto bank is due to the following goals and objectives:
- Creation of a legal framework for operations with cryptocurrencies;
- Ensuring user security by introducing modern data and transaction protection technologies;
- Stimulating innovation in the financial sector and developing new business models;
- Increasing tax revenues by legalizing transactions with crypto assets;
- Attracting foreign investment in the economy of the republic.
The Ministry of Economy also notes that a significant increase in interest in cryptocurrencies among both individuals and legal entities has been observed in recent years. Creation of a crypto bank will help structure and legalize this market.
«At the moment, the cryptocurrency market remains poorly regulated. The introduction of a crypto bank will help establish clear rules and standards, which will increase trust in crypto assets.
Creation of a crypto bank will ensure the protection of user rights, which will reduce the risks of fraud and unauthorized access to funds. The crypto bank will also become a platform for the introduction of new financial technologies, such as smart contracts, DeFi and others, which will contribute to the modernization of the financial system.
In addition, with the introduction of a crypto bank, an increase in the volume of transactions in cryptocurrencies is expected, which in turn will increase tax revenues, new jobs are expected to be created in the field of financial technologies, and will strengthen the country’s reputation as one of the centers of financial innovation,» the ministry reported.
The draft law provides for the possibility of attracting deposits in the form of digital assets on its own behalf on contractual terms, placing own and / or attracted funds and digital assets on its own behalf on contractual terms; opening and maintaining crypto accounts; making settlements and payments on behalf of clients and correspondent banks; purchasing, paying for, accepting, storing and confirming digital assets, including credit and payment cards; acquiring the right to demand from third parties the fulfillment of obligations in monetary form (factoring) based on digital assets; paying off a debt obligation based on digital assets by purchasing simple bills and bills of exchange (forfaiting); making client transfers, including without opening an account; opening and maintaining correspondent accounts for non-resident banks of the Kyrgyz Republic; carrying out operations on foreign currency accounts for clients and on the acquisition (exchange) of foreign currency on behalf of the client; purchase and sale (exchange) of foreign currency on one’s own behalf; carrying out operations with precious metals (only bank silver, gold, platinum and coins made of the said high-grade metals); carrying out operations with derivative financial instruments (derivatives); accepting and making payments and settlements for goods and services that are not the result of one’s activities, in favor of third parties through payment systems based on information technology and electronic means and methods of making payments.
