The Central Bank of Kyrgyzstan has announced that it is drafting a law to regulate cryptocurrency. It will allow Asian countries to join forces with countries worldwide that have clear policies on crypto-assets.
Moving Towards Regulation
Apex Bank discloses this in a document posted on its website, where it states that development rolled out in consultation with stakeholders in the crypto space. According to the bank, most of the bills will be covered and cover the sale and purchase of crypto assets in the country.
It went on to say that the law has regulations to reduce the spread of crypto fraud and money laundering systems. Moreover, it will ensure that customers and investors of crypto assets in the country fall under the laws’ protection to reduce such fraud.
The bank hopes the law will allow better fintech products and an ideal environment for crypto companies. The possibility of introducing a tax on digital assets received a mention, which would be an essential step towards adoption.
The bank also assumed that comprehensive crypto legislation would create clarity in the gray areas and help investors make the financial space attractive. Despite these proposals, Kyrgyzstan top banks are expecting some obstacles to get in the way of cryptocurrency legislation. One of them is the cross-border nature of cryptocurrencies, making it difficult to track transactions, resulting in a lack of adequate regulation.
It makes regulation nearly impossible as there may be conflicting data. However, in collaboration with crypto stakeholders, this concern will be reflected in the new law.
Kyrgyzstan is Ideal for Miners
Kyrgyzstan is no stranger to the cryptocurrency industry and one of the countries favored by miners for its cheap electricity. However, the lack of specific laws regarding cryptocurrencies has created problems between miners and regulators.
It became clear in 2019 when the national parliament passed a law to tax crypto miners to stop 45 crypto mining companies from using more energy than the three local territories combined.
In July 2020, the Kyrgyzstan Parliament considered a law on taxation and regulation of cryptocurrency activity to increase government revenue from emerging industries. The central bank’s crypto project will do a lot to position the country as one of the leading companies in the crypto industry.
In June, lawmakers in the Kyrgyz Republic considered legislation to tax and regulate cryptocurrency mining activities. The tax miner law proposed a flat rate of 15% of the profits generated from the sale of mined crypto assets. The bill was first proposed in August 2019 and aimed to add another $ 4.2 million to the Kyrgyz Republic’s annual budget of around $ 1 billion.
Parliament also discussed the introduction of fixed electricity rates for miners at the Board of Governors’ proposal of $ 0.05 per kilowatt-hour (KW / h) last December – a 70% premium than the national average of around $ 0.030 per KW / hour.