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National Bank Chair comments on inclusion of cryptocurrencies in forex reserves

The Chairman of the National Bank of Kyrgyzstan, Melis Turgunbaev, explained why the bank is cautious about the inclusion of cryptocurrencies in gold and foreign exchange reserves. He posted the comment on Facebook.

Currently, some central banks around the world are discussing the possibility of including cryptocurrencies in their gold and foreign exchange reserves. The National Bank of the Kyrgyz Republic is closely monitoring the development of this issue, but at the moment it is cautious about this idea for several reasons, he specified.

According to him, the National Bank adheres to the key principles of managing gold and foreign exchange reserves: ensuring their security, liquidity and profitability. This means that the reserves should be placed exclusively in reliable and low-risk assets.

«Secondly, cryptocurrencies are known for their high volatility and sharp fluctuations in value, which makes them an extremely risky choice for reserves designed to serve as a guarantee of economic stability.

Another restraining factor is the dependence of cryptocurrency liquidity on legislative and regulatory conditions. Any tightening of regulations in certain jurisdictions may significantly limit the availability and use of digital assets, which creates additional risks for the National Bank.

In addition, cryptocurrencies have not yet been internationally recognized as a reliable instrument for forming reserves. Even the central banks of large economically developed countries are only studying the potential of digital assets, but do not include them in their gold and foreign exchange reserves,» Melis Turgunbaev noted.

He added that it is also necessary to take into account the legal uncertainty associated with the use of cryptocurrencies, as well as the risks of their use in illegal activities. Transparency and financial stability remain priorities for the National Bank.

Nevertheless, the National Bank continues to study modern financial technologies, including the possibilities of digital currencies.

Currently, the main focus is on developing its own digital currency — the «digital som», which can be adapted to the needs of the country’s economy and minimize possible risks.

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