Kyrgyzstan Moves Closer to CBDC with New Legislation

Kyrgyzstan has taken a significant step towards adopting a central bank digital currency (CBDC) with the passage of new legislation. President Sadyr Zhaparov signed a constitutional law on April 17, granting legal tender status to a future “digital som.” This move authorizes the National Bank of the Kyrgyz Republic to issue and regulate the digital version of the national currency, ensuring sole authority over its circulation and operational oversight.

The legislation empowers the central bank to manage the platform that will support the digital som's circulation. However, while the legal framework is in place, Kyrgyz officials have not yet committed to a full-scale launch. A decision on whether to implement the digital som is expected by late 2026. In the interim, the central bank plans to initiate testing of the system later this year. If the digital currency is implemented, authorities will be required to introduce safeguards, including encryption protocols, to prevent misuse and ensure transaction integrity.

Kyrgyzstan now joins over 100 countries exploring CBDCs, though only a few, including the Bahamas, Nigeria, Zimbabwe, and Jamaica, have officially launched state-backed digital currencies. This move follows a series of digital asset initiatives in Kyrgyzstan. Earlier in April, the country signed a cooperation agreement with former Binance CEO Changpeng Zhao, who will advise officials on blockchain regulation and crypto-sector growth. President Zhaparov described the partnership as a step toward boosting economic resilience and expanding digital opportunities.

Kyrgyzstan's abundant hydroelectric capacity makes it an attractive location for crypto-related infrastructure. While over 30% of the country’s energy already comes from hydropower, much of this potential remains untapped. This factor could support energy-intensive blockchain operations in the future. Despite growing interest from governments, CBDCs remain controversial among privacy advocates who warn of risks related to surveillance and centralized control. Kyrgyz officials maintain that any digital currency framework will prioritize financial stability, innovation, and long-term benefits for both businesses and citizens.