Kyrgyzstan advances towards implementing its own central bank digital currency (CBDC) as President Sadyr Japarov signed critical legislation on Thursday that grants the proposed digital som legal recognition.

Key Highlights:

• The new law acknowledges the digital som as legal tender should the country decide to proceed with a CBDC.
• Amendments made to the Constitutional Law of the Kyrgyz Republic set the groundwork for this development, ensuring the digital currency’s formal status.

Initially adopted on March 20 by the Kyrgyz supreme council, these amendments empower the National Bank of the Kyrgyz Republic to formulate and endorse guidelines for transactions on the digital som platform. Testing of the digital currency is slated for this year, but a final decision on its issuance is not expected until the next year.

As many nations globally evaluate the prospects of launching their own digital currencies, Kyrgyzstan’s move echoes similar initiatives previously observed in the U.K., Nigeria, Jamaica, and the Bahamas, following a progressive path despite controversies surrounding such currencies in the crypto community.

“The purpose of the Constitutional Law is to launch a pilot project of a prototype of a national digital currency, the ‘digital som,’ as well as to create a legal basis and its status,” a statement from the president’s office indicated.

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