The National Bank of Kyrgyzstan (NBKR) is planning to license the cryptocurrency exchanges operating in the country as public interest in digital currencies are growing with the rising Bitcoin prices, according to a Tazabek report.
Tolkunbek Abdygulov, Chairman of the NBKR, revealed the intentions of the regulator in regulating the exchanges on Friday.
“The purpose of the NBKR is to create conditions for clients, for citizens of the Kyrgyz Republic,” Abdygulov said (translated from Russian). “We plan to grant a license to cryptocurrency exchange operators to buy and sell cryptocurrency. There must be a guarantee.”
Further, he explained that the licensing regime would eliminate the fraudulent risk on the part of the crypto exchanges.
“Today you sell soms, buy dollars – if the exchange office has a license from the NBKR, there is no danger of losing money. There is a desire to do the same for cryptocurrencies,” he said (translated from Russian).
The First Step to Regulate Crypto
Kyrgyzstan is following various other countries to license the cryptocurrency exchanges. Though regulations around cryptocurrencies are still not solid, countries like Japan and Thailand have mandated the licensing of crypto exchanges. The United Kingdom went a bit ahead and ordered all companies dealing with crypto to register themselves.
Meanwhile, major countries like India are taking a different round and mulling on whether to put a blanket ban on cryptocurrencies. The Nigerian central bank already ordered all banks to cut services for the crypto exchanges.
However, Abdygulov is aware of the risks of cryptocurrencies and warned against the price risks.
“We give advice to our citizens: Investing in cryptocurrencies is very risky,” he said (translated from Russian). “If Bitcoin hit $50K yesterday, it could drop to $20K tomorrow. And, then all your invested money will be burned. This is a very high-risk investment.”