Kyrgyzstan Passes Major Virtual Assets Law to Regulate Crypto Markets

Kyrgyzstan’s Parliament just passed a new law on virtual assets.

The Parliament approved the bill on Virtual Assets in three readings at once, which is meant to give more rules and oversight for digital tokens, making their use and trade more regulated and official.

The bill introduces a licensing system, and defines new types of digital tokens, like stablecoins and RWA tokens.

State-Backed Crypto Initiatives

The law plans to set up a government crypto reserve and run state-backed crypto mining using state infrastructure and resources. 

The new law gives the president more authority over virtual assets, including how they are issued, circulated, and regulated. It introduces regulatory sandboxes, which allow new crypto services and technologies to be tested safely in limited areas before wider rollout.

Regulation, Compliance, and Crypto Mining Rules

The bill also clearly outlines the roles of government bodies in regulating the crypto sector.

One authority will be responsible for licensing virtual asset service providers, while another will oversee compliance, including measures to prevent money laundering and terrorist financing.

It also sets clear rules for crypto mining, from registering miners, setting equipment standards to licensing requirements for companies involved in virtual asset transactions.

Overall, this is a big step toward a safer, more organized crypto system in Kyrgyzstan.

Crypto Trading Surges

This comes as cryptocurrency trading is booming in Kyrgyzstan. 

Kabar, the Kyrgyz National News Agency, reported that from January to July 2025, exchanges handled 1 trillion soms in transactions, according to Economy and Trade Minister Bakyt Sydykov. During this period, about 1 billion soms in taxes was received from participants in the crypto industry. 

The minister noted that “every year, this sector keeps growing and expanding,” highlighting the rising importance of crypto in the country’s economy.

Kyrgyzstan has 169 virtual asset exchange operators, 13 crypto exchanges, and 11 companies involved in industrial crypto mining.

Kyrgyzstan Responds to UK Sanctions

The new law comes after the UK sanctioned Kyrgyz banks and crypto exchanges over alleged links to Russian efforts to bypass sanctions. President Sadyr Japarov appealed to leaders in the US and UK, stating that none of Kyrgyzstan’s banks were involved.

To prevent further issues, only the state-owned Keremet Bank will handle Russian rubles. The president emphasized that the country will protect its economy while meeting international obligations.