KEY FACTS: Kyrgyzstan's parliament has unanimously passed a pioneering bill on September 9, 2025, establishing a state cryptocurrency reserve to diversify the nation's financial assets through virtual currencies, stablecoin issuance, and real-world asset tokenization. Spearheaded by Economy and Commerce Minister Bakyt Sydykov, the legislation defines the reserve as a collection of state-owned digital assets formed via mining, issuance, and acquisition, aiming to enhance financial stability and attract investment. The bill, awaiting President Sadyr Japarov’s signature, ensures that state crypto mining adheres to existing energy tariffs, addressing concerns about resource strain, particularly with projects like Kambar-Ata-1.

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Source: ICO Bench

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Kyrgyzstan Parliament Passes New Bill Establishing State Cryptocurrency Reserve

Kyrgyzstan's parliament has unanimously passed a groundbreaking bill that introduces the concept of a state cryptocurrency reserve. This legislative move, spearheaded by Economy and Commerce Minister Bakyt Sydykov, marks a significant pivot toward integrating blockchain technology and virtual assets into the nation's financial framework. Passed in three readings on September 9, the bill not only defines key terms like "state crypto reserve" and "state mining" but also paves the way for innovative practices such as stablecoin issuance and the tokenization of real-world assets.

The announcement came swiftly on Wednesday, with Kyrgyzstan's parliament, known as the Jogorku Kenesh, confirming the bill's passage via an official statement. This rapid approval underscores the urgency and consensus surrounding the initiative, which builds on the country's progressive stance on digital currencies. Just weeks ago, President Sadyr Japarov signed a law granting legal status to the digital som, Kyrgyzstan's central bank digital currency (CBDC), further solidifying the nation's commitment to fintech innovation. With this new bill awaiting the president's signature, experts suggest it could transform how the government manages national assets, potentially shielding the economy from traditional financial risks while tapping into the global crypto boom.

At the heart of the bill is the establishment of a "state crypto reserve," described in the legislation as "a set of virtual assets owned by the state and formed through their mining, issuance, tokenization, and acquisition." Unlike conventional reserves dominated by gold or foreign currencies, this digital repository would encompass a diverse mix of assets, including cryptocurrencies like Bitcoin, stablecoins pegged to fiat currencies, and tokenized representations of physical assets such as real estate or commodities. The flexibility of this approach allows the government to accumulate value in cryptographic forms without relying solely on volatile pure cryptos, offering a balanced portfolio that could appreciate over time.

Minister Sydykov, who presented the bill during a parliamentary committee meeting earlier this week, emphasized the reserve's role in enhancing Kyrgyzstan's financial resilience. He highlighted how it could attract investment and foster technological growth. In his words:

"The state crypto reserve will serve as a tool to increase financial stability by diversifying and adopting new accumulation instruments,"

The bill also legalizes state involvement in cryptocurrency mining alongside the issuance of stablecoins and the tokenization of real-world assets (RWAs). Stablecoins, which maintain a steady value by being backed by reserves like the U.S. dollar, could provide a bridge between traditional finance and the crypto ecosystem, while RWAs bring tangible assets onto the blockchain for easier trading and fractional ownership.

This multifaceted strategy is designed to leverage Kyrgyzstan's unique position. The country, nestled in the mountainous heart of Central Asia, has already seen a surge in crypto mining activities due to its relatively low electricity costs and cold climate, which aids in cooling mining hardware. However, the bill clarifies that the state will not monopolize energy resources for this purpose, addressing potential public concerns head-on.

One of the most debated aspects of the bill revolved around energy consumption, a hot-button issue in a nation where hydropower generates the bulk of electricity. Critics worried that state-backed mining could strain the grid or prioritize crypto operations over essential services. Sydykov quelled these fears during a Monday meeting, firmly stating that the government would adhere to the same regulations as private entities. He reminded lawmakers that there is a separate tariff for mining in the country, with no exception to the state. He assured lawmakers that there will be no farm at the thermal power plant, while Kambar-Ata-1 will not be utilized for mining.

The procedural details for managing the reserve, including formation, storage, and utilization, will be outlined by presidential decree once the bill is signed. This executive oversight allows for adaptability, enabling the government to respond to evolving market conditions and regulatory landscapes. For now, the focus remains on building a robust legal foundation that encourages innovation while mitigating risks like market volatility or cybersecurity threats.

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Information Sources:

• Kenesh.kg
• Yahoo Finance
• Cointelegraph
• ICO Bench

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