CBDC: Kyrgyzstan Prepares for Digital Currency Trial Under New Law
A major shift is underway in Kyrgyzstan’s financial system, as the country lays the groundwork for testing a government-issued digital currency.
The new initiative, centered on the digital som, is part of a broader plan to explore technology-driven financial infrastructure in the coming years.
The legal framework for this move was signed into law on April 17 by President Sadyr Zhaparov, granting the digital som formal legal recognition and placing its management entirely under the control of the country’s central bank. This gives the National Bank of the Kyrgyz Republic the authority to shape how the system operates and to determine when it will be ready for broader use.
Rather than launching immediately, the government will begin with a pilot program designed to test the practical use of the digital currency. Full implementation is expected to be decided upon in 2025, based on the outcome of these early trials.
The digital som will differ from conventional cryptocurrencies in a fundamental way: it will be issued and backed by the state. This makes it a public alternative to private digital tokens, combining the efficiency of digital payments with the institutional trust of national currency.
Officials have emphasized that this move is about more than convenience. By creating a secure, centralized digital payment mechanism, Kyrgyzstan aims to improve transaction transparency, protect users, and reduce reliance on cash-based systems. The new currency may also support the growth of local businesses by streamlining payments and encouraging fintech innovation.
Kyrgyzstan has recently drawn attention for its untapped energy potential—especially in hydropower—which has made it an attractive location for blockchain-related ventures. The country uses only a fraction of its hydroelectric capacity, making it a resource-rich environment for digital experimentation. Earlier this month, interest from the crypto world grew stronger when former Binance CEO Changpeng Zhao offered support for Kyrgyzstan’s efforts to strengthen its regulatory approach.
Alexander Stefanov
Reporter at Coindoo
Alex is an experienced finance journalist and a cryptocurrency and blockchain enthusiast. With over 8 years of experience covering the crypto, blockchain and fintech industries, he deeply understands the complex and constantly evolving world of digital assets. His insightful and thought-provoking articles provide readers with a clear picture of the latest developments and trends in the market. His passionate approach allows him to break down complex ideas into accessible and insightful content. Follow up on his content to be up to date with the most important trends and topics.
