Nazia Saeed
- Kyrgyzstan establishes a state cryptocurrency reserve and state mining operations under a new presidentially appointed authority.
- The reserve will hold diversified digital assets, including Bitcoin, stablecoins, and tokenized real-world assets.
- Mining operations will follow existing energy tariffs, maintaining fairness with private miners.
Kyrgyzstan has taken a significant step toward creating a national cryptocurrency reserve, embedding the initiative within broader reforms to its virtual asset legislation. On September 10, the Kyrgyz Parliament approved amendments to the country’s “On Virtual Assets” law in three readings, signaling a major restructuring of the regulatory framework.
The bill, introduced by Economy Minister Bakyt Sydykov, primarily shifts oversight of the crypto sector to a new, presidentially appointed authority, effectively stripping the Financial Market Regulation and Supervision Service of its previous powers. Within this broader regulatory reform lies the more ambitious plan: the legal establishment of a state cryptocurrency reserve and state-run mining operations, giving the government the ability to directly acquire and manage digital assets.
State cryptocurrency reserve and diversified holdings
Under the amendments, the state cryptocurrency reserve will function as a government-managed portfolio of digital assets, acquired through both direct purchases and mining activities. While Bitcoin and other widely recognized cryptocurrencies are expected to form part of the reserve, the legislation also envisions diversification through stablecoins backed by fiat currency and tokenized real-world assets (RWAs).
Newsletter
Get weekly updates on the newest crypto stories, case studies and tips right in your mailbox.
The law allows for government-backed mining operations, which will operate under existing energy tariffs, ensuring parity with private miners and addressing concerns about electricity consumption and energy supply.
To encourage innovation while maintaining legal certainty, the legislation introduces a regulatory sandbox where experimental digital asset solutions can be tested in a controlled environment. This includes blockchain-based RWAs, which tie tokenized units to tangible assets, expanding the potential composition of the state reserve.
Investor protection and market stability
Beyond asset accumulation, the amendments emphasize investor protection, mandating that only secured assets are issued. The law also requires transparency and market stability, ensuring that government participation does not disrupt the broader cryptocurrency ecosystem.
Kyrgyzstan’s latest move positions it among a small group of nations exploring government-managed crypto reserves, combining traditional financial oversight with the emerging opportunities of digital assets.
