Kyrgyzstan wants to regulate the digital currency exchange. The country’s finance ministry has developed a draft regulation for the sector that says this will encourage innovation and lead to the growth of a digital economy.
The Kyrgyz cabinet is concerned about the digital currency exchange, reports the local sales point 24.kg. Therefore, the State Service for Regulation and Supervision of Financial Markets (Gosfinnadzor) has drawn up draft regulations for the sector. The agency, reporting to the Treasury Department, believes the regulations will not only encourage innovation, but will also help the Asian country advance its digital economy.
“This will reduce risks and support the development of innovative technologies and the shaping of a digital economy, as well as laying the foundation for the development of the systemic market and creating the conditions for participation for a wider range of participants, including qualified investors.” said the agency.
Gosfinnadzor believes the market will benefit from these regulations, including by attracting more institutional investors. In addition, the government will also benefit as the Treasury Department predicts that legitimate digital currency deals could make a significant contribution to the treasury.
“The regulation of the activities of crypto exchanges will be based on a functional approach of the authorized body in the field of regulation and supervision of the financial market,” said the ministry.
In its draft regulation, the ministry defines the status, rights, functions and obligations of a digital currency exchange. It also describes the mandatory requirements these exchanges must meet in order to obtain a license.
The draft ordinances also set out the mandatory requirements that exchanges must comply with in relation to anti-money laundering and terrorist financing requirements. This is becoming increasingly important to regulators as exchanges that neglected these requirements are now tracked around the world. BitMEX hit the headlines when US authorities started tracking it, culminating in a $ 100 million settlement. Binance is also on the radar of a dozen regulators, quickly catching up with any requirements it has disregarded for years.
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