Kyrgyzstan Revolutionized Economy With State Crypto Reserve and crypto Mining

Kyrgyzstan has made one of its boldest moves yet in the digital asset space, passing sweeping amendments to its “On Virtual Assets” bill that pave the way for a state cryptocurrency reserve and formalize government-led mining operations.

The legislation positions Kyrgyzstan as a rising crypto hub in Central Asia, with ambitions to turn digital assets into a pillar of financial stability and economic growth.

The bill, adopted in three consecutive parliamentary readings, officially introduces the concepts of a state crypto reserve and state mining.

Economy and Commerce Minister Bakyt Sydykov explained that the reserve will enable the government to accumulate digital assets through mining, tokenization of real-world assets (RWAs), and issuance of fiat-backed stablecoins.

Sydykov emphasized that this reserve is intended to diversify Kyrgyzstan’s financial instruments and strengthen its long-term economic stability.

Importantly, the government itself will not be exempt from the country’s mining tariffs, and major power facilities like the Kambar-Ata-1 hydropower and thermal plants will not be diverted toward mining.

A Mix of Assets, Not Just Bitcoin

Unlike traditional reserves that rely on gold or fiat, Kyrgyzstan’s planned crypto reserve will represent a blend of assets. While Bitcoin will be part of the portfolio, the reserve will also include tokenized RWAs and stablecoins to broaden its scope.

The law makes clear: “A state cryptocurrency reserve is a set of virtual assets owned by the state and formed through their mining, issuance, tokenization, and acquisition.”

The President of Kyrgyzstan will oversee the full framework for the reserve’s formation, storage, and management.

This diversification highlights a strategic approach — using crypto not just for speculation but as a tool to bolster resilience in the national economy.

Regional Context and Next Steps

The bill now awaits President Sadyr Japarov’s signature. Earlier this year, Japarov approved a central bank digital currency (CBDC), and his administration has been one of the region’s strongest backers of blockchain innovation.

Kyrgyzstan’s push also mirrors developments in neighboring Kazakhstan, where President Kassym-Jomart Tokayev recently urged officials to pursue a strategic crypto reserve while accelerating investments in artificial intelligence and blockchain.

By cementing clear rules for mining, stablecoins, and tokenized assets, Kyrgyzstan is carving out a place as a regulatory pioneer in Central Asia — balancing innovation with oversight while laying the groundwork for broader institutional participation in its growing crypto sector.