Kyrgyzstan adopted a law that will serve as the foundation for regulating the digital assets sector, as well as providing for the creation of a crypto reserve and the organization of state-level mining operations.
The Parliament of Kyrgyzstan passed the law “On Virtual Assets,” which will form the basis for regulating the cryptocurrency sector in the country. Lawmakers approved the initiative in three readings at once, highlighting the strategic importance of the document.
The law provides for the establishment of a state crypto reserve and the launch of mining operations using government resources and infrastructure. In addition, it introduces new legal definitions, including fiat-pegged stablecoins and RWA tokens.
The document grants the country’s president authority to set the rules for issuance, circulation, and regulation of virtual assets. Another major innovation is the introduction of “ regulatory sandboxes ,” special frameworks for testing innovative services and technologies within limited areas.
The law also clarifies the division of responsibilities among government bodies: one authorized agency will issue licenses to virtual asset service providers, while another will monitor compliance with regulations, including anti-money laundering and counter-terrorism financing measures. However, the specific agencies that will carry out these functions weren’t determined yet.
For market participants, the law introduces mandatory registration of mining equipment and sets technical requirements for it, as well as a licensing procedure for legal entities working with digital assets.
Max Krupyshev, CEO of CoinsPaid , previously noted that cryptocurrency reserves can be considered a way to reduce reliance on traditional financial assets as part of a portfolio diversification strategy. “Any state could implement this initiative if it sees strategic value in doing so,” Max commented.
In May 2025, Kyrgyzstan’s Ministry of Finance announced plans to issue a state dollar-pegged stablecoin, USDKG, in Q3 2025, secured in part by the country’s gold reserves.
