BISHKEK, Kyrgyzstan, November 14. Kyrgyzstan has authorized commercial banks to open special escrow accounts for operations involving virtual assets, including cryptocurrencies and tokens, Trend reports via the country’s National Bank.
The updated instructions now formally allow the opening of escrow accounts for virtual asset transactions. This change follows amendments to the NBKR Board Resolution “On Approval of the Instructions for Working with Bank Accounts and Bank Deposit Accounts” dated October 31, 2012.
An escrow account is a legal arrangement where a neutral third party holds funds or assets on behalf of two transacting parties until all agreed-upon contractual conditions are met, primarily serving to reduce risk and prevent fraud. In the case of cryptocurrency, this function is often replicated by smart contracts or multi-signature wallets, which automatically hold and release digital assets when predefined conditions on the blockchain are fulfilled.
Recently, Kyrgyzstan’s parliament enacted a new law on digital assets aimed at significantly enhancing the regulation of virtual assets. The legislation targets three primary objectives: the establishment of a national framework for cryptocurrency mining, the introduction of a formal licensing system for cryptocurrency-related operations, and the expansion of President Sadyr Zhaparov’s authority to define regulations governing the issuance, circulation, and oversight of virtual currencies. Additionally, the bill incorporates regulatory sandboxes, designed to facilitate the testing of innovative crypto services and technologies within designated geographic areas.
