Kyrgyzstan slips state crypto reserve framework into new bill

Kyrgyzstan has advanced a framework for a national crypto treasury through a broader regulatory bill, strategically tucking the ambitious state reserve initiative alongside more conventional licensing reforms.

Summary

• Kyrgyzstan passed amendments to its “On Virtual Assets” law.
• The country established a state cryptocurrency reserve and state-run mining.
• Regulatory oversight shifts to a presidentially appointed body.

In an announcement on Sept. 10, the Kyrgyz Parliament said it had adopted a set of amendments to its “On Virtual Assets” law in three readings. Economy Minister Bakyt Sydykov introduced the bill, which on its face overhauls regulatory oversight by shifting power to a new, presidentially appointed body.

However, tucked inside the broader regulatory framework lies a more provocative concept: the legal establishment of a “state cryptocurrency reserve” and “state mining,” granting the government authority to accumulate digital assets directly.

Inside Kyrgyzstan’s proposed crypto framework

According to the announcement, the amendments strip the Financial Market Regulation and Supervision Service of its authority over the crypto sector. In its place, an as-yet-unnamed “authorized body” to be directly determined by the president will assume control.

Notably, the bill defines a state cryptocurrency reserve as a portfolio of digital assets acquired, mined, and tokenized by the government. While Bitcoin and other established cryptocurrencies are expected to be part of this mix, the legislation emphasizes diversification, including the issuance of stablecoins backed by fiat currency and tokenized real-world assets.

Per the announcement, state-backed mining operations will fall under existing energy tariffs, with the government subject to the same rules as private miners, thereby addressing concerns over electricity consumption and energy supply.

The law also establishes a regulatory sandbox designed to allow experimentation with innovative digital asset solutions in a controlled, transparent environment. RWAs on blockchains like Solana, which tie digital units to tangible assets, are intended to expand the scope of the reserve while maintaining legal certainty.

Beyond asset accumulation, Kyrgyzstan is keen to protect investors, requiring that only secured assets be issued and that all operations maintain market stability and transparency.