The President of Kyrgyzstan, Sadyr Zhaparov, has signed a constitutional law allowing the launch of a central bank digital currency pilot project, while granting legal status to the "digital som" - the national currency in digital form. The law permits the National Bank of Kyrgyzstan to exclusively issue digital som, establish management rules, and supervise the platform's operations. However, the final decision on official CBDC issuance is not expected before the end of 2026. If approved, the central bank will also need to implement cryptographic protection measures to ensure safety and prevent fraud.
Testing of the digital som platform is expected to occur this year. Zhaparov's approval came nearly a month after the Kyrgyzstan parliament, Jogorku Kenesh, passed constitutional amendments on March 18. CBDC continues to face criticism in the cryptocurrency community, with concerns about financial privacy invasion and excessive government control. Currently, only four official CBDCs have been launched, including the Bahamas' Sand Dollar, Nigeria's e-Naira, Zimbabwe's ZiG, and Jamaica's JAM-DEX.
Kyrgyzstan is actively developing in the cryptocurrency field. Earlier this month, former Binance CEO, Changpeng "CZ" Zhao, signed a Mnemonics with Kyrgyzstan's foreign investment agency to advise on blockchain and cryptocurrency regulations. Zhaparov believes this initiative will promote economic development and ensure digital asset safety, opening new opportunities for businesses and social sectors.
Kyrgyzstan, with its mountainous terrain and abundant renewable energy resources, is considered ideal for cryptocurrency mining. According to the International Energy Agency, over 30% of Kyrgyzstan's total energy supply comes from hydroelectric power plants, but only 10% of the country's hydroelectric potential is utilized.
