Kyrgyzstan Proposes First Regulatory Framework for Crypto
Anna Baydakova - CoinDesk
The National Bank of Kyrgyzstan has published draft legislation that would legally define cryptocurrency and how it may be used in the Central Asian nation. With the proposed legislation, the central bank is following the call of the Financial Action Task Force (FATF) to regulate cryptocurrencies and prevent related money laundering and terrorism financing risks, according to an explanatory note.
With Kyrgyz citizens becoming increasingly interested in cryptocurrencies, and the technology gaining traction in electronic commerce worldwide, it's important to mitigate the risks associated with crypto, the National Bank wrote.
The regulator announced the proposed legislation on Dec. 31, 2020, publishing a package of drafts detailing why the new bill is needed and how it fits into Kyrgyzstan's existing regulation.
In one draft, cryptocurrency is defined as a digital good that represents value, is stored and used electronically, and is neither a legal means of payment nor a document representing any property rights. Virtual assets, however, are a different kind of asset and can represent property rights, another draft says, without going into detail.
Under the proposal, the property rights of cryptocurrency owners would be protected by the courts. Any companies and individual entrepreneurs, if they are not registered crypto operators or miners, should not accept crypto as payment for goods or services, as well as in a form of investment or savings deposit. Entities would not be able to offer crypto brokerage or issue securities based on cryptocurrencies.
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