Report: Kyrgyzstan outlaws bitcoin … mostly

In the tiny, landlocked nation of Kyrgyzstan, bitcoin has recently become illegal. While most people in the bitcoin community could be forgiven for not even knowing there is a country called Kyrgyzstan (population 5.8 million), the ruling by the National Bank of the Kyrgyz Republic is nonetheless important. Not because of the ruling itself, but because of what that ruling implies. Even in a decidedly rural stretch of land sandwiched between Russia and China, with one of the lowest population densities on the planet, bitcoin is gaining enough traction to merit an official response from the local government.

As rulings go, however, the National Bank of the Kyrgyz Republic’s decision in mid-June is more pre-emptive warning than a genuine line in the sand (or steppe, in this case). The National Bank noted that bitcoin and other cryptocurrencies were gaining international attention, and that even in Kyrgyzstan itself “it could be observed attempts to spread and use the ‘virtual currency’ to popularize them among the population of our country.”

“[We] should not forget that under the legislation of the Kyrgyz Republic the sole legal tender on the territory of our country is the national currency of Kyrgyzstan ‘som,'” the ruling warns. “And the use of ‘virtual currency,’ bitcoins, in particular, as a means of payment in the Kyrgyz Republic will be a violation of the law of our state.”

According to CoinDesk’s reporting on the topic, the som (KGS) is currently worth about $0.019.

The statement goes on to recite the standard warnings about cryptocurrencies published by dozens of countries and states earlier this year. Even though the use of bitcoin is clearly against the letter of the law in Kyrgyzstan, the ruling hints that this is unlikely to be enforced. The publication closes with:

Thus, persons or entities in any way using ‘virtual currency’ subject to the above-mentioned risks. And also, when involved in these activities, they assume all the possible negative consequences of the possible violation of the legislation of the Kyrgyz Republic.”

If bitcoin can make it in the arid backwater of Kyrgyzstan, it might just be able to make it anywhere.