Kyrgyzstan grants digital som legal status as CBDC pilot advances

Kyrgyzstan has taken a major step toward launching a central bank digital currency (CBDC) after President Sadyr Zhaparov signed a law granting the “digital som” legal tender status and authorising a pilot project for the digital currency.

The new law gives the National Bank of the Kyrgyz Republic exclusive authority to issue and regulate the digital som, including the power to set rules for its issuance, circulation, and the management of the underlying platform.

“The purpose of the Constitutional Law is to launch a pilot project of a prototype of a national digital currency, the ‘digital som,’ as well as to create a legal basis and its status,” according to a statement from the president’s office.

Testing of the digital som platform is expected to begin this year, but a final decision on whether to fully launch the CBDC will not be made until late 2026.

The legislation was first approved by Kyrgyzstan’s parliament in March and is part of a broader initiative to modernise the country’s financial infrastructure and promote innovation in digital payments.

If the central bank moves forward with the digital som, it will be responsible for implementing cryptographic protections to ensure the currency’s security and prevent fraudulent use.

With Kyrgyzstan's action, more than 115 nations are investigating or testing CBDCs, but only a small number—such as the Bahamas, Nigeria, Zimbabwe, and Jamaica—have officially introduced their own digital currency.

The rollout of the digital som is occurring alongside a broader tightening of crypto regulations in Kyrgyzstan, with new rules requiring all virtual asset service providers to obtain licenses and banning the use of unlicensed exchanges by residents.

The government’s focus is on transparency, security, and consumer protection, aiming to foster a healthy digital asset ecosystem while preventing misuse and financial crime.

President Zhaparov has emphasised the potential of digital assets to support economic growth and improve the security of virtual transactions, stating the initiative will “generate new opportunities for businesses and society as a whole.”

Kyrgyzstan’s abundant renewable energy resources, particularly hydropower, also position the country as a favorable environment for crypto mining and digital finance innovation.

As the digital som pilot proceeds, authorities will monitor the project’s impact and gather feedback before making a final decision on a nationwide CBDC rollout by the end of 2026.