Kyrgyzstan’s Legal System is Supportive of Blockchain Technology
The Republic of Kyrgyzstan could be one of the most blockchain friendly countries, thanks to its accommodative approach. According to a report published in the country, the legal environment there offers better opportunities for startups in the blockchain industry and cryptocurrency investors.
The report, titled ‘Legal status of blockchain technology in Kyrgyzstan’ and dated March 12, 2018, was compiled by law firms John Tiner & Partners (Geneva) and John Tiner and Partners (Bishkek) at the behest of Kyrgyzstan’s International Financial Center Development Agency.
Blockchain Innovation in Central Asia
The legal analysis aimed to study the current legal laws and legislation with regards to blockchain technology, investments in cryptocurrencies, mining of digital coins, the legality of cryptocurrency trading and exchanges and public investment in ICOs in the central Asian country.
No legislation in Kyrgyzstan prevents any blockchain technology-related implementation. The country, therefore, does not interfere in the industry and aims to encourage innovation in the cryptocurrency space as well.
The document further noted that mining cryptocurrencies or investing in them directly or through ICOs is not illegal in by any law in the country. The only restriction is that investors must comply with the local tax laws. A unique differentiating characteristic of the Republic of Kyrgyzstan as compared to other countries is that the legislation to allow individuals to participate in cryptocurrency business actively is already in place.
The report said: “Without a need for legislative reforms, Kyrgyzstan can now satisfy the demand of global crypto-investors to deal with blockchain-based assets on a firm legal basis.
“We are fully in agreement with the position of the National Bank that non-professional investment of savings into crypto-assets carries an unacceptable risk. The introduction of blockchain technologies can speed up securities settlements, optimize state procurement procedures and make the country a regional center for securities offerings by startups.”
Kyrgyz Stock Exchange and Government Look to Blockchain Tech
Furthermore, there are several more opportunities for the cryptocurrency industry in Kyrgyzstan. The report presented an optimistic view with regards to the future of blockchain technology in the country. The Kyrgyz stock exchange is working on a pilot project to optimize real-time settlement in trading of securities.
The government could also move to digitize its records using the ledger and make use of the technology to improve transparency in public tenders. The study observed that the government wants to make Kyrgyzstan a hub for offering investment services related to cryptocurrencies simply by providing a liberal, yet regulated regime.
Further steps will be taken to transform the country into a more friendly place for startups to raise capital either by a traditional Initial Public Offering (IPO) or Initial Coin Offering (ICO). In both cases, the respective security or token will be traded on the local stock exchange, and commons can make the most of investment opportunities.
The liberalizing of the current laws to promote business is in line with the view and ideology of the government. A. Atambayev, former President of the Kyrgyz Republic, had said, “We are doing everything to make Kyrgyzstan a country of free people, free entrepreneurs, investors, and entrepreneur.”