Kyrgyzstan’s President Moves CBDC Closer to Implementation

Kyrgyzstan President Sadyr Japarov has taken a significant step towards issuing a central bank digital currency (CBDC) by signing legislation that grants legal status to the “digital som.” The central Asian nation is still deliberating on whether to implement a CBDC, but the recent amendments made to the Constitutional Law of the Kyrgyz Republic ensure that the digital som will be recognized as legal tender if the central bank chooses to proceed.

“The purpose of the Constitutional Law is to launch a pilot project of a prototype of a national digital currency, the ‘digital som,’ as well as to create a legal basis and its status,” stated a message from the president’s office.

With these new regulations, the National Bank of the Kyrgyz Republic will be empowered to formulate and approve guidelines for transactions on the digital som platform. These amendments were initially adopted on March 20 by Kyrgyzstan’s supreme council. The country plans to begin testing the digital som later this year, as reported by local news outlet Trend News Agency. A conclusive decision regarding the issuance of the CBDC is expected to be made next year.

The concept of CBDCs has sparked debate among some cryptocurrency advocates; however, several nations, including the U.K., Nigeria, Jamaica, and the Bahamas, as well as the European Union, have been moving toward the implementation of a CBDC. In contrast, countries like the U.S. have largely stepped back from the prospect of issuing one.