Kyrgyzstan President Brings CBDC a Step Closer to Reality

Kyrgyzstan President Sadyr Japarov took his country a step closer to issuing its own central bank digital currency Thursday, signing legislation that gives the “digital som” legal status.

The central Asian country is still deciding whether or not to issue a CBDC, but Thursday’s amendments to the Constitutional Law of the Kyrgyz Republic ensures that the digital som will be treated as legal tender if the central bank goes ahead with issuing a CBDC.

“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 on the president’s site said.

Under the new provisions, the National Bank of the Kyrgyz Republic will be able to develop and approve rules for conducting payments on the digital som platform.

These provisions, described as amendments on the president’s website, were first adopted on March 20 by Kyrgyzstan’s supreme council. The country is due to begin testing the digital som this year, according to local news outlet Trend News Agency. The country is not expected to make a final decision on whether to issue the CBDC until next year.

The idea of CBDCs has been controversial among some crypto proponents, but countries like the U.K., Nigeria, Jamaica and the Bahamas — as well as the European Union’s multinational bloc — have moved in the direction of issuing a CBDC, while other countries like the U.S. have largely moved away from the idea of issuing one.