On July 16, 2014 at the meeting of the Board of the National Bank of the Kyrgyz Republic the following issues were considered and respective resolutions were adopted: 

· “On implementation of Paragraph 1 of Resolution of Board of the National Bank of the Kyrgyz Republic “On approval of the “Instruction on the procedure of compliance with the limits of open currency positions of microfinance companies” of May 30, 2014. No. 24/8” (№ 32/4);  

· “On approval of the “Rules of the regulation of credit unions, performing operations on Islamic principles of banking and finance” (№ 32/5); 

· “On introduction of amendments and additions to some normative legal acts of the National Bank of the Kyrgyz Republic in the capital adequacy requirements for banks conducting operations in accordance with the Islamic principles of banking and finance” (№ 32/6).  

Warning of the National Bank of the Kyrgyz Republic 

on the spread and use of the “virtual currency”, in particular, bitcoins (bitcoin) 

National Bank of the Kyrgyz Republic notes that recently the world has seen the emergence and spread of such new phenomenon of “virtual currency”, in particular,bitcoins (bitcoin).They are also called “cryptcurrency”, “digital currency”, “decentralized virtual currency” (hereinafter “virtual currency”).In Kyrgyzstan also it could be observed attempts to spread and use the“virtual currency”, to popularize them among the population of our country.  

At the same time 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”.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.  

In this regard, the National Bank of the Kyrgyz Republic considers necessary to inform the population about the risks and consequences associated with the use of “virtual currency”.  

1. Risks associated with the lack of security.Nobody has obligationsonthis“virtual currency” and they do not have the material (financial) support.As opposed to the traditional paper-based or non-cash money held in banks, such “virtual currency” does not have a tangible materialexpression, operates on the basis of distributed electronic networks and their circulation is carried out only within that network.  

2. Lack of real value of “virtual currency”.Operations on their purchase-sale and exchange for other traditional currencies can be providedthrough special terminals, so-called “bitcoin ATM”, or so-called “virtual exchanges” or “exchange offices”, where the formation of prices and the exchange rate of “virtual currency” is realized. “The cost of “virtual currency” is not tied to any currency or other asset, and, in fact, the formation of its cost is influencedby demand and supply for it, that creates high risks of exchange rate volatility and loss of value.  

3. Risks in calculations with “virtual currency”.Purchasing of “virtual currency”is made directly, without the mediation of any financial institutions.Cancel of transactions is impossible.Due to the fact that the system has no control center, it is impossible to appeal or cancel unauthorized transactions.If payment has been made, but the service or goods were not received, there is no guarantee of refund.In case of theft of “virtual currency” it is impossible to get it back because in the “virtual currency” system the personality of its members are anonymous and reverse transaction without the consent of both parties is not possible.  

“Virtual currency”is regulated by no central government agency in the world.Distribution ofpeer-to-peer network and the lack of any center makes public or private regulation of systemalmost impossible.  

In connection with the foregoing, subject to high risks, the National Bank of the Kyrgyz Republic strongly recommends resist from use of “virtual currency”,do not participate in the operations of their purchase and sale and exchange for other currencies or assets, do not provide or receive “virtual currency” as payment for goods, services and works.  

National Bank notes that “virtual currency” is not governed by the laws of the Kyrgyz Republic and for today no legal and regulatory framework for the regulation of relations connected with “virtual currency”.  

Thus, persons or entities in any way using “virtual currency” subject to the abovementionedrisks.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.  

Licenses/certificates have been issued to the following non-bank financial institutions and exchange offices: 

LLC “Finans Profi” (license No. 5138 of July 15, 2014 for exchange operations with foreign currency). Registration No. 3129. Legal address: 144, Abdrakhmanov Street, Bishkek.  

LLC “Bereke KMT” (license No. 5137 of July 15, 2014 for exchange operations with foreign currency). Registration No. 3128. Legal address: 10-2, Den-Syaopin prospect, Bishkek.  

Interbank payments