Kyrgyzstan takes a significant step closer to issuing its own central bank digital currency (CBDC) with the signing of amendments providing legal status to the ‘digital som’.
Kyrgyzstan President Sadyr Japarov has signed amendments that provide the ‘digital som’ with legal status, bringing the country closer to issuing its own central bank digital currency (CBDC). The move is seen as a significant step forward in Kyrgyzstan’s exploration of the concept.
Sadyr Japarov is a Kyrgyzstani politician who served as the Prime Minister of Kyrgyzstan from October 2020 to January 2021.
Born on November 6, 1968, in the Issyk-Kul Region, Japarov rose to prominence after being elected as the Mayor of Osh in 2018.
He later became the Chairman of the Movement for Justice, a political party in Kyrgyzstan.
Japarov's tenure as Prime Minister was marked by controversy and protests, ultimately leading to his resignation.
Prior to entering politics, Japarov worked in various industries, including finance and construction.
Under the new provisions, the National Bank of the Kyrgyz Republic will have the authority to develop and approve rules for conducting payments on the digital som platform. This allows the central bank to establish a clear regulatory framework for the use of the digital currency, which is expected to be tested this year.
The amendments were first adopted by Kyrgyzstan‘s supreme council in March 2023 and provide a legal basis for the launch of a pilot project for a national digital currency. The country is not expected to make a final decision on whether to issue a CBDC until next year, but the move reflects growing interest in the concept among Central Asian nations.
The idea of CBDCs has been debated among crypto proponents and governments worldwide. While some countries, such as the U.K., Nigeria, Jamaica, and the Bahamas, have moved forward with issuing their own CBDCs, others, like the U.S., have largely abandoned the concept. The European Union‘s multinational bloc is also exploring the possibility of issuing a CBDC.
Central Bank Digital Currencies (CBDCs) are digital forms of fiat currency issued by central banks.
They aim to provide a secure, efficient, and accessible means of payment.
CBDCs can be used for both retail and wholesale transactions, reducing the need for physical cash and traditional payment systems.
Currently, over 80 countries are exploring or testing CBDCs, with Sweden's Riksbank launching the world's first CBDC pilot in 2016.
Kyrgyzstan’s move towards issuing a CBDC marks an important development in the country’s efforts to modernize its financial system. As the country continues to explore the potential benefits and challenges of a digital currency, it will be watching developments in other countries closely. With the testing of the digital som expected to begin this year, Kyrgyzstan is poised to take a significant step forward in its journey towards digitalization.
- coindesk.com | Kyrgyzstan President Brings CBDC a Step Closer to Reality
