Kyrgyzstan emerges as Central Asia’s leading crypto hub with advanced legislation and launch of USDKG stablecoin
While many Central Asian countries are still struggling with digital asset regulations, Kyrgyzstan has quietly and effectively transformed itself into one of the most crypto-friendly jurisdictions in the region. With a combination of a clear legal framework, sound tax policies, and an innovative government vision, Kyrgyzstan is establishing itself as a leading destination for blockchain technology and digital assets.
The Law on Virtual Assets: Kyrgyzstan’s Progressive Legal Foundation
2022 marks a significant milestone with Kyrgyzstan’s adoption of the Law on Virtual Assets, officially recognizing virtual assets as legal entities. The law not only regulates the issuance, storage, and circulation of digital assets, but also requires licensing of virtual asset service providers (VASPs). By the end of 2024, Kyrgyzstan had issued more than 126 VASP licenses – the highest number in Central Asia, demonstrating that the country is leading the way in regulating digital assets in an orderly and transparent manner.
Central bank paves the way for integration of digital assets with traditional finance
Another strategic move came from the National Bank of Kyrgyzstan, which issued guidelines allowing commercial banks to provide cryptocurrency services, as long as they comply with financial supervision. This integration has helped transaction volumes through licensed VASPs surge to $4.2 billion in the first seven months of 2024, a dramatic jump from $59 million in 2022. Transactions at retail outlets account for 98% of activity, indicating widespread adoption.
The sector is regulated by the State Agency for Supervision and Regulation of Financial Markets, with cross-sectoral consultation and community feedback to continuously refine policies.
Cryptocurrency mining: Transparent, legal and taxable
Kyrgyzstan is not just about trading, it is also building a legal framework for cryptocurrency mining. The government has adopted a tax model based on electricity consumption – starting at 15% and reducing to 10% by 2024 to encourage investment. In 2023, tax revenue from mining activities will exceed $1 million – 10 times higher than originally expected.
Kyrgyzstan’s tax policy for digital assets is designed to be unified, avoiding fragmented regulations that make it difficult for businesses and investors, affirming the government’s commitment to promoting friendly and sustainable innovation.
USDKG – The first stablecoin backed by gold and issued by the Kyrgyz state
A symbolic step in Kyrgyzstan’s financial digitization journey is the launch of USDKG – a gold-backed stablecoin, developed in cooperation between the Kyrgyz Ministry of Finance and private partners. USDKG is pegged 1:1 to the US dollar, but what makes it special is that each token is fully backed by physical gold held by the Kyrgyz state, periodically audited by independent parties.
This stablecoin is directly integrated into the national financial system, strictly complies with KYC/AML standards and is capable of serving cross-border transactions, domestic payments as well as long-term value storage. This is a clear example of combining technological innovation with financial sovereignty.
Kyrgyzstan – a model of transparent regulation and digital financial innovation
Speaking at the TOKEN2049 conference held in Dubai, Mr. Gabriel Guerra, USDKG project advisor, shared:
“Kyrgyzstan is demonstrating that a clear legal framework combined with strong institutional commitment can create a sustainable development environment for digital assets. USDKG is a testament to the convergence of modern technology and trust in the traditional financial system.”
In a world where many countries are still wary of digital assets, Kyrgyzstan stands out as a pioneering example of how governments can leverage blockchain and crypto to serve the national and public interest. As blockchain adoption spreads globally, Kyrgyzstan could well become a strategic cryptocurrency and stablecoin hub in Central Asia and beyond.
About USDKG
USDKG is the first gold-backed stablecoin in Central Asia, issued in partnership with the Kyrgyz Ministry of Finance. Each token is fully backed by physical gold, owned by the state and audited by an independent third party. USDKG provides a secure, transparent, and legal means of storing value for individuals and organizations. Learn more at