AKIPRESS.COM - On April 2, the Kyrgyz Stock Exchange and the International Financial Center Development Agency published a report on "the Legal Status of Blockchain Commerce in the Kyrgyz Republic" commissioned from international legal experts.
The goal of the legal research was to determine how the legislation of Kyrgyzstan correlates with the blockchain-based commerce: cryptocurrency trading and investments, crypto mining, exchange trading in crypto-assets and the public placement of crypto-instruments through ICOs ('initial coin offerings').
The report highlights:
1. The authors of the report are fully in agreement with the position of the National Bank of the Kyrgyz Republic that non-professional investment of savings into crypto-assets carries an unacceptable risk.
2. The authors see the following blockchain-based opportunities for Kyrgyzstan:
- to optimize securities settlements (a pilot project is being organized with the Kyrgyz Stock Exchange);
- to use blockchain for Government registers and State procurement procedures;
- to offer the investment services infrastructure of Kyrgyzstan (exchanges, investment companies) to global crypto-asset investors enabling them to deal in crypto-assets within a liberal but well regulated legal regime;
- to make Kyrgyzstan a regional centre for startup IPOs by allowing company promoters to raise funds by issuing securities in a regulated, but user-friendly manner and at the same time supplementing the functionality of the offering and subsequent trading with the use of crypto-currencies and tokens, to enhance the liquidity of the securities.
The authors of the report, led by Director of the International Finance Centre Development Agency and Executive Chairman of the Swiss-Central Asian Business Council Valery Tutykhin concluded that the legislation of the Kyrgyz Republic is very friendly to crypto-asset commerce. Without a need for legislative reforms Kyrgyzstan can now satisfy the demand of global crypto-investors and blockchain business developers for a liberal, but well regulated jurisdiction. Authors of the report added: "This activity must be done with due regard to the local tax law, anti-money laundering controls, consumer and investor protection norms and other legislation regulating the ordinary commerce."
The authors of the report believe that today, “Kyrgyz jurisdiction allows the development of blockchain projects on an international scale without the need to amend the legislation.”
In mid-March 2018 the report was discussed with all the relevant Government departments. We stress, however, that this is a private initiative of the investment market participants.
Kyrgyz Stock Exchange (KSE) is a licensed securities exchange in the Kyrgyz Republic. Its shareholders are major broker-dealers, the Kazakhstan Stock Exchange, the Istanbul Exchange and the State Property Management Fund of the Kyrgyz Republic [www.kse.kg]
International Finance Centre Development Agency is a corporation established for the international promotion of the investment and financial infrastructure of the Kyrgyz Republic. Its main shareholders are Swiss-Central Asian Business Council (Zürich) and the City of Bishkek [www.kyrgyzbusiness.com]