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Kyrgyzstan

Retail_Trading_Status

Allowed-Regulated Unknown
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2025-06-26 13:01
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Executive Summary

In Kyrgyzstan, individuals are legally permitted to buy, sell, and hold cryptocurrencies, subject to a regulatory framework established by the Law “On Virtual Assets” (2022). Cryptocurrencies are treated as property and can be used as a medium of exchange or investment, but are not legal tender. The State Service for Regulation and Supervision of the Financial Market regulates VASPs, requiring licensing, AML/KYC compliance, and adherence to capital requirements. Challenges remain, including high capital requirements for VASPs potentially favoring larger international exchanges.

Key Pillars

The primary regulator is the State Service for Regulation and Supervision of the Financial Market under the Ministry of Economy and Commerce (also referred to as ADITC). Key regulatory pillars include licensing requirements for Virtual Asset Service Providers (VASPs), AML/CFT and KYC obligations, and specific minimum capital requirements for VASPs.

Landmark Laws

  • Law “On Virtual Assets” (January 2022, effective mid-2022): Defines virtual assets as civil rights objects, regulates their issuance, storage, and circulation, and introduces licensing requirements for VASPs. * Legislation signed in April 2025: Granted legal tender status to the pilot digital som.

Considerations

Cryptocurrencies are classified as property and are not legal tender. Profits from cryptocurrency operations are taxed as ordinary income, and miners are subject to standard business taxes plus a power levy. The Travel Rule is enforced, requiring VASPs to share sender and receiver details for transactions above 85,000 KGS (approximately USD 1,000).

Notes

In 2014, the National Bank of the Kyrgyz Republic initially issued warnings about Bitcoin. By 2018, the impracticality of a complete ban was acknowledged, leading to the Law on Virtual Assets in 2022. Kyrgyzstan is piloting a Central Bank Digital Currency (CBDC), the "digital som," with testing planned for 2025 and a decision on a full launch expected by late 2026. The government has engaged with international players like Binance for advice on blockchain policy and development.

Detailed Explanation

Kyrgyzstan permits individual citizens and residents to buy, sell, and hold cryptocurrencies, under a regulatory framework established by the Law “On Virtual Assets,” adopted in January 2022 and effective from mid-2022. This law defines virtual assets as civil rights objects, regulating their issuance, storage, and circulation. Cryptocurrencies are not recognized as legal tender; only the national currency (the som) and the pilot digital som hold this status, which received legal tender status through legislation signed in April 2025. However, cryptocurrencies are considered property and can be used as a medium of exchange and investment asset.

The regulatory environment, overseen by the State Service for Regulation and Supervision of the Financial Market under the Ministry of Economy and Commerce (also referred to as ADITC), includes licensing for Virtual Asset Service Providers (VASPs) like cryptocurrency exchanges and exchangers. Different license types exist, including for trading operators, currency exchangers, and mining operators. Licensed VASPs must implement AML/CFT and KYC procedures, including customer identification and verification, transaction monitoring, and reporting of suspicious activities. The Travel Rule is enforced, requiring VASPs to share sender and receiver details for transactions above 85,000 KGS (approximately USD 1,000).

Significant minimum capital requirements have been established for VASPs, such as 10 billion KGS (approximately USD 114 million) for cryptocurrency exchanges effective January 1, 2026, and 40 million KGS for exchangers. Profits from cryptocurrency operations are generally taxed as ordinary income. Miners are subject to standard business taxes plus a specific power levy (initially 15%, reduced to 10% in 2024). The State Service for Regulation and Supervision of the Financial Market oversees the sector, conducts audits, and can freeze suspicious accounts. Foreign platforms without a domestic permit risk being blocked.

Kyrgyzstan is actively developing its crypto regulatory framework, including plans for enhanced reporting standards for OTC trades and derivatives by September 2025. The country is also piloting a Central Bank Digital Currency (CBDC), the “digital som,” with testing planned for 2025 and a decision on a full launch expected by late 2026. The government has engaged with international players like Binance for advice on blockchain policy and development. The National Bank of the Kyrgyz Republic initially issued warnings about Bitcoin in 2014. By 2018, the impracticality of a complete ban was acknowledged, leading to the 2022 Law on Virtual Assets. Challenges remain, including high capital requirements, hesitancy from local banks in dealing with crypto firms, evolving regulations, and infrastructure needs for large-scale mining.

Summary Points

Retail Trading of Cryptocurrencies in Kyrgyzstan: Regulatory Analysis

I. Overall Regulatory Status:

  • Allowed-Regulated: Individual citizens and residents are legally permitted to buy, sell, and hold cryptocurrencies.
  • Not Legal Tender: Cryptocurrencies are not recognized as legal tender; only the national currency (Som) and the pilot digital Som hold this status.
  • Property Status: Cryptocurrencies are considered property and can be used as a medium of exchange and an investment asset.

II. Key Regulatory Bodies and Their Roles:

  • State Service for Regulation and Supervision of the Financial Market (under the Ministry of Economy and Commerce):
    • Licensing authority for Virtual Asset Service Providers (VASPs).
    • Oversees the sector, conducts audits, and can freeze suspicious accounts.
    • Also referred to as ADITC in some sources for licensing and the State Service for Financial-Market Supervision for AML.
  • National Bank of the Kyrgyz Republic:
    • Initially issued warnings about Bitcoin (historical context).
    • Piloting the Central Bank Digital Currency (CBDC), the "digital som."

III. Important Legislation and Regulations:

  • Law "On Virtual Assets" (January 2022, effective mid-2022):
    • Defines virtual assets as civil rights objects.
    • Regulates their issuance, storage, and circulation.
    • Introduced licensing requirements for VASPs.
  • AML/CFT Regulations:
    • VASPs must implement Anti-Money Laundering/Counter-Financing of Terrorism (AML/CFT) procedures.
    • Includes customer identification and verification (KYC), transaction monitoring, and reporting of suspicious activities.
  • Travel Rule:
    • VASPs must share sender and receiver details for transactions above 85,000 KGS (approximately USD 1,000).

IV. Requirements for Compliance (VASPs):

  • Licensing: VASPs (e.g., cryptocurrency exchanges, exchangers) must obtain a license to operate. Different license types exist (trading operators, currency exchangers, mining operators).
  • AML/CFT and KYC: Implement AML/CFT and KYC procedures.
  • Capital Requirements:
    • Cryptocurrency exchanges: Minimum authorized capital of 10 billion KGS (approximately USD 114 million) effective January 1, 2026.
    • Exchangers: Minimum authorized capital of 40 million KGS.
  • Taxation:
    • Profits from cryptocurrency operations are generally taxed as ordinary income.
    • Miners are subject to standard business taxes plus a specific power levy (initially 15%, reduced to 10% in 2024).

V. Notable Restrictions or Limitations:

  • Cryptocurrencies Not Legal Tender: Cannot be used to settle everyday bills.
  • High Capital Requirements: May favor larger international exchanges.
  • Hesitancy from Local Banks: Some local banks may be hesitant in dealing with crypto firms.
  • Foreign Platforms: Foreign platforms without a domestic permit risk being blocked.

VI. Recent Developments or Changes:

  • Digital Som (CBDC): Received legal tender status in April 2025; testing planned for 2025, with a decision on full launch expected by late 2026.
  • Enhanced Reporting Standards: Plans for enhanced reporting standards for OTC trades and derivatives by September 2025.
  • Binance Engagement: Government has engaged with international players like Binance for advice on blockchain policy and development.
  • Tax Rate Discussions: Ongoing discussions about potential changes to the tax rates for VASPs.

Full Analysis Report

Retail_Trading_Status in Kyrgyzstan

Report Date: 2025-06-26

Topic: Retail_Trading_Status

Description: Assess whether individual citizens and residents in the country are legally permitted to buy, sell, and hold cryptocurrencies. Detail the regulatory environment surrounding this activity (e.g., KYC/AML requirements imposed on platforms, general warnings issued).

Identified Status: Allowed-Regulated

Detailed Narrative Explanation:

Individual citizens and residents in Kyrgyzstan are legally permitted to buy, sell, and hold cryptocurrencies. This activity is subject to a developing but specific regulatory framework primarily established by the Law "On Virtual Assets," adopted in January 2022 and effective from mid-2022. This law defines virtual assets as civil rights objects and regulates their issuance, storage, and circulation. While cryptocurrencies are not recognized as legal tender (only the national currency, the som, and the pilot digital som hold this status), they are considered property and can be used as a medium of exchange and an investment asset.

The regulatory environment has been progressively strengthening, positioning Kyrgyzstan as a jurisdiction actively seeking to foster a transparent and secure environment for blockchain innovation and decentralized finance. Key aspects of this regulation include:

  • Licensing of Virtual Asset Service Providers (VASPs): Entities such as cryptocurrency exchanges and exchangers are required to obtain a license to operate in Kyrgyzstan. The licensing authority is the State Service for Regulation and Supervision of the Financial Market under the Ministry of Economy and Commerce (also referred to as ADITC in some sources for licensing and the State Service for Financial-Market Supervision for AML). There are different license types, including for trading operators (full exchanges), currency exchangers, and mining operators.
  • AML/CFT and KYC Requirements: Licensed VASPs are obligated to implement Anti-Money Laundering/Counter-Financing of Terrorism (AML/CFT) and Know Your Customer (KYC) procedures. This includes customer identification and verification, transaction monitoring, and reporting of suspicious activities. The Travel Rule, requiring VASPs to share sender and receiver details for transactions above a certain threshold (85,000 KGS, approximately USD 1,000), is also enforced in line with FATF guidance.
  • Capital Requirements: Significant minimum capital requirements have been established for VASPs. For instance, cryptocurrency exchanges are required to have a minimum authorized capital of 10 billion KGS (approximately USD 114 million), effective January 1, 2026, while exchangers need 40 million KGS. This aims to ensure financial stability and attract serious investors.
  • Taxation: Profits from cryptocurrency operations are generally taxed as ordinary income, and miners are subject to standard business taxes plus a specific power levy (initially 15%, reduced to 10% in 2024). There have been discussions about potential changes to the tax rates for VASPs.
  • Oversight and Enforcement: The State Service for Regulation and Supervision of the Financial Market oversees the sector, conducts audits, and can freeze suspicious accounts. Foreign platforms without a domestic permit risk being blocked.
  • Ongoing Developments: Kyrgyzstan is actively working on further developing its crypto regulatory framework. This includes plans for enhanced reporting standards for OTC trades and derivatives by September 2025. The country is also piloting a Central Bank Digital Currency (CBDC), the "digital som," which received legal tender status through legislation signed in April 2025, with testing planned for 2025 and a decision on a full launch expected by late 2026. The government has also engaged with international players like Binance for advice on blockchain policy and development.

Historically, the National Bank of the Kyrgyz Republic initially issued warnings about Bitcoin in 2014. However, by 2018, the impracticality of a complete ban was acknowledged, leading to a shift towards creating a competitive regulatory environment. This culminated in the 2022 Law on Virtual Assets, which formalized the licensing process and aimed to bring more legitimacy to the sector.

Despite the progress, challenges remain, including the high capital requirements that may favor larger international exchanges, some hesitancy from local banks in dealing with crypto firms, the evolving nature of regulations requiring ongoing compliance updates, and infrastructure needs for activities like large-scale mining. Nevertheless, the overall approach indicates a clear intent to allow and regulate retail cryptocurrency trading.

Specific, Relevant Text Excerpts:

  • "Citizens and companies may own or trade any cryptocurrency, but only the paper som is legal tender—crypto cannot settle everyday bills. Exchanges that serve local users must be licensed in Kyrgyzstan; foreign platforms without a domestic permit risk blocking orders." - Coinfomania
  • "Central to these reforms is the Law “On Virtual Assets,” adopted in 2022, which defines virtual assets as civil rights objects and regulates their issuance, storage, and circulation. The law also introduced licensing requirements for virtual asset service providers (VASPs), recognizing them as financial institutions." - Cointelegraph
  • "Kyrgyzstan requires crypto exchanges and service providers to obtain a license from the State Service for Regulation and Supervision of Financial Markets. This ensures businesses meet stringent anti-money laundering (AML) and counter-terrorist financing (CTF) standards, safeguarding the market and protecting investors." - Scorechain
  • "Законодательство о криптовалютах в Киргизии устанавливает четкие правила ведения криптобизнеса, что снижает юридические риски и повышает прозрачность операций." (Legislation on cryptocurrencies in Kyrgyzstan establishes clear rules for conducting crypto business, which reduces legal risks and increases the transparency of operations.) - YB Case
  • "В юридическом контексте Киргизии криптовалюты не признаются законным платежным средством, однако они активно используются как средство обмена и инвестиционный актив. По законодательству, криптовалюты классифицируются как собственность, что влечет за собой определенные налоговые обязательства для их владельцев." (In the legal context of Kyrgyzstan, cryptocurrencies are not recognized as legal tender, however, they are actively used as a medium of exchange and an investment asset. According to the legislation, cryptocurrencies are classified as property, which entails certain tax obligations for their owners.) - YB Case
  • "Для осуществления деятельности криптобиржи и/или криптообменника необходимо в обязательном порядке зарегистрировать юридическое лицо на территории Кыргызской Республики и получить лицензию, выданную Службой регулирования и надзора за финансовым рынком при Министерстве экономики и коммерции Кыргызской Республики (далее – «Финнадзор»)." (To carry out the activities of a crypto exchange and/or crypto exchanger, it is mandatory to register a legal entity in the territory of the Kyrgyz Republic and obtain a license issued by the Service for Regulation and Supervision of the Financial Market under the Ministry of Economy and Commerce of the Kyrgyz Republic (hereinafter - "Finnadzor").) - Axton Law Firm
  • "The Travel Rule mandates that Virtual Asset Service Providers (VASPs) must attach sender and receiver data to every transfer exceeding 85,000 KGS (approximately US$1,000)." - AInvest (Corroborated by Coinfomania and Scorechain)
  • "В январе 2022 года Кыргызстан принял Закон «О виртуальных активах», легализовав криптовалютные операции и дав старт новому витку цифровой экономики." (In January 2022, Kyrgyzstan adopted the Law "On Virtual Assets", legalizing cryptocurrency operations and launching a new round of the digital economy.) - Акчабар

Direct, Accessible URL Links to Sources:

  1. Coinfomania - Cryptocurrency Regulation in Kyrgyzstan: https://coinfomania.com/cryptocurrency-regulation-in-kyrgyzstan/
  2. Cointelegraph - Kyrgyzstan solidifies role as Central Asia's leading crypto hub...: https://cointelegraph.com/press-releases/kyrgyzstan-solidifies-role-as-central-asias-leading-crypto-hub-with-progressive-legislation-and-launch-of-usdkg
  3. Scorechain - Kyrgyzstan Crypto Regulations 2025: https://www.scorechain.com/blog/kyrgyzstan-crypto-regulations-2025-stay-ahead-of-the-game/
  4. YB Case - Регулирование криптобизнеса в Киргизии (Regulation of crypto business in Kyrgyzstan) 2025: https://ybcase.com/ru/countries-ru/asia-ru/regulirovanie-kriptobiznesa-v-kirgizii-ru
  5. YB Case - Regulation of crypto business in Kyrgyzstan 2025 (English version of the above): https://ybcase.com/en/countries-en/asia-en/regulation-of-crypto-business-in-kyrgyzstan
  6. AInvest - Kyrgyzstan's 10 Billion KGS Capital Rule Attracts 120 Licensed Crypto Firms: https://ainvest.com/news/kyrgyzstan-s-10-billion-kgs-capital-rule-attracts-120-licensed-crypto-firms-01hyz7p1n3n15850w7h4m3370p/
  7. CoinStats - Cryptocurrency Regulation in Kyrgyzstan...: https://coinstats.app/blog/cryptocurrency-regulation-in-kyrgyzstan/ (Note: This article appears to be a republication or summary of the Coinfomania article)
  8. Axton Law Firm - Требования законодательства Кыргызской Республики для осуществления деятельности криптообменников и криптобирж (Requirements of the legislation of the Kyrgyz Republic for the activities of crypto exchangers and crypto exchanges): https://axton.legal/news/trebovaniya-zakonodatelstva-kyrgyzskoy-respubliki-dlya-osushchestvleniya-deyatelnosti-kriptoobmennikov-i-kriptobirzh/
  9. Акчабар - Кыргызстан и криптовалюты: налоги против роста инноваций (Kyrgyzstan and cryptocurrencies: taxes versus innovation growth): https://akchabar.kg/ru/article/economica/kyrgyzstan-i-kriptovalyuty-nalogi-protiv-rosta-innovacij/
  10. Bits.Media - Кыргызстан увеличил требования к минимальному уставному капиталу криптобирж (Kyrgyzstan increased the minimum authorized capital requirements for crypto exchanges): https://bits.media/kyrgyzstan-uvelichil-trebovaniya-k-minimalnomu-ustavnomu-kapitalu-kriptobirzh/
  11. Finance Magnates - Kyrgyzstan Grants Legal Status to CBDC, Central Bank to Begin Testing: https://www.financemagnates.com/cryptocurrency/kyrgyzstan-grants-legal-status-to-cbdc-central-bank-to-begin-testing/
  12. CryptoSlate - Kyrgyzstan moves toward digital currency with new CBDC legislation: https://cryptoslate.com/kyrgyzstan-moves-toward-digital-currency-with-new-cbdc-legislation/
  13. National Bank of the Kyrgyz Republic - Draft Law on Cryptocurrency Circulation (from 2020, for historical context): https://www.nbkr.kg/contout/OUTDOCVIEW1.jsp?docid=3914
  14. AlfaBit - AML/CTF and KYC Policy (Example of a VASP's policy in Kyrgyzstan): https://alfabit.org/ru/aml-cft-kyc-policy
  15. IncFine - Получение криптолицензии в Киргизии (Obtaining a crypto license in Kyrgyzstan): https://incfine.com/ru/blog-ru/poluchenie-kriptolicenzii-v-kirgizii
  16. vc.ru - Кыргызстан как юрисдикция для криптобизнеса (Kyrgyzstan as a jurisdiction for crypto business): https://vc.ru/legal/1210435-kyrgyzstan-kak-yurisdikciya-dlya-kriptobiznesa
  17. TKDeal - Криптолицензия в Киргизии (Crypto license in Kyrgyzstan): https://tkdeal.com/articles/kriptoliczenziya-v-kirgizii
  18. Shard - Регулирование криптовалют в Кыргызстане (Cryptocurrency regulation in Kyrgyzstan) (February 2023): https://shard.ru/journal/regulation/regulirovanie-kriptovalyut-v-kyrgyzstane/
  19. ThePaypers - Kyrgyz Republic signs MoU with Binance on crypto development: https://thepaypers.com/cryptocurrencies/kyrgyz-republic-signs-mou-with-binance-on-crypto-development--1268610
  20. Finance Magnates - $BTC Kyrgyzstan's President Signs Law to Establish Central B...: https://www.financemagnates.com/cryptocurrency/regulation/btc-kyrgyzstans-president-signs-law-to-establish-central-bank-digital-currency/
  21. Vertex AI Search Result (providing additional context on licensing and regulation): [https://vertexaisearch.cloud.google.com/grounding-api-redirect/AUZIYQHkYNEBpMY8nCEP2pAFItm8lOleGbSO38575UfBkrgt0_m2y4v5Qro-4zymroJSEWa_VM8ue31tVXuGqqMvSbcxcZfS1Qu32V11ON75A_tX0lXRsU_sicN-I7YL6lsrBqHT7Sm-fqvb7eEYNKbXsY4lmbkMZf97hM7KazKsaDAQOjB0tj2aiJHBELjOAI4fMnsOnigrCFNvpi4WdBvqIm871Q1s8gaV9_QEYpWk9Z5iB1nik3WyXEuIif9GvXI=]
  22. Vertex AI Search Result (providing additional context on the evolving regulatory landscape): [https://vertexaisearch.cloud.google.com/grounding-api-redirect/AUZIYQFVl3bhTKUTnqg3dJ4Y9e7lNAXjWDYto33eoBuROrMZPrFP9LEtiod7GCtkj9HBBiIhhhrnICw1o5RndfUueUdx17fovMyef5SEBE-SqOsoRVwamaXy-ev-3yPzLTjwYdP6Kgds9X_xAXe8wcFCTfLuJC2gjuuCFJZIsLpaAuGI63jy5T-SFUgp7ExJV4xtiL8OYiHCApWSZXvWIFNRZVTonEDEB3LIm7_P0aNzMBjPWkqUwKBDxH6iXqhVGuUym_dRD14lUhyy9LZwnNOcyrvRkTL9FD4-rO_PRzhrkhMivVXwuZY=]
  23. Vertex AI Search Result (providing additional context on crypto banks): [https://vertexaisearch.cloud.google.com/grounding-api-redirect/AUZIYQF72SQ2il7lX4Pi-WKyeSONO-3PP3vRMey0zQ4AQZLDv72RXa8wMXY5AwDAMjfWhhEqxHFDz39IkSt-ddKKnFXl8uwXDsvL9ab5F1cvcdmzhwoOLI8V4GXKHrn9kf7Z2U7iDRfKDEIpX7w9h5_h-mry5FWBaErJHJ6rbcF-Zfrte2BNZZ5DrC7V4r6UXaCPJg==]
  24. Vertex AI Search Result (providing additional context on licensing and taxation): [https://vertexaisearch.cloud.google.com/grounding-api-redirect/AUZIYQH1RDLvnQOeEHvRrSa0c-3tJ6MhZtlm7l7zIhjAHQqiJdU9cyNt4sqCrNNC5v_jMkJ720F_PbCxu65TG5TMTnFvFr5U_UoIefTLSotEsOrS1OODeU9DDRhTNrUn48FhcYqGWf0Hxn5XFlVexOCrXuSPPw6aXDULAGB7NfLKxOsKKy7mR7tdwNup0OhQI193XLWVQFg8M0ZBUkGXrPbAsE0iS-CZqx7Zhuwa9ux-q5g=]
  25. Vertex AI Search Result (providing additional context on the evolving market and state initiatives): [https://vertexaisearch.cloud.google.com/grounding-api-redirect/AUZIYQFuEC6qEIB0xuTQMXl8wJCTDLwYHUdKgYhZ10S2LCJoL0PQdeQ865lIDuKau8yaatqS90sc2hirq9dIm3eTUGi0Zm49Zc4AFtrFtAMC3C-lsig5MKyvWN6TkSqEKTMoxYpR6IPPxm2KrKqItBr_iMywW1deR7F0QOZ-RHDIv_LpvjVxKxKEQAqdNrq17Y98eRUq5kGgcam-U1VdowedTDX0DQdX53MuasdZQtx85gZk52e75Xc6pQ==]

Web Sources (25)

Sources discovered via web search grounding

Search queries used (8)
  • retail cryptocurrency trading Kyrgyzstan legal status 2025
  • Kyrgyzstan cryptocurrency regulation 2025
  • National Bank of Kyrgyz Republic cryptocurrency stance 2025
  • Kyrgyzstan AML/KYC cryptocurrency regulations
  • Закон Кыргызской Республики о криптовалютах
  • Регулирование криптовалют в Кыргызстане 2025
  • Статус розничной торговли криптовалютой в Кыргызстане
  • Правила KYC/AML для криптовалют в Кыргызстане
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