While countries like the United States and other people in Asia are still thinking about the CBDC show, Kyrgyzistan has made a step forward clearly. The country has approved a pilot project for its own digital money called Digital Som. This new version of the national currency will be dealt with as a legal obligation if the CB goes ahead with the publication of a CBDC.
Test Kyrgyzstan to launch CBDC
On April 17, President Sadyr Zhaparov signed a new constitutional law which not only gave the DOS digital legal status but also gave the country’s central bank to manage its future.
The Kyrgyz National Bank of the Republic will decide how it works, how people can use it and when it is available for everyone.
Currently, the final decision to deploy the CBDC nationally will be taken next year, tests should start in 2025. The country will soon start a pilot project to see how it works in real life. A final decision on the opportunity to launch it fully will be made next year.
What makes this special?
Unlike regular digital portfolios or cryptocurrencies, a CBDC is issued and supported by the country’s central bank. This means that it offers the safety of a traditional currency but with the speed and convenience of modern technology.
Countries like Jamaica, Bahamas and the European Union already test or use CBDC. Kyrgyzstan now joins this list. On the other hand, countries like the United States are still thinking about it.
Why does Kyrgyzstan opt for CBDC?
Kyrgyzistan wants to modernize its financial system and make digital payments easier and safer. Earlier this month, the former CEO of Binance CZ said that it would help Kyrgyzstan to establish solid cryptography rules. The government hopes that it will help companies develop and improve digital security.
Kyrgyzstan is also an excellent place for the exploitation of cryptography because it has a lot of clean hydroelectricity. Even if only 10% of its hydroelectricity is used today, more than 30% of the country’s energy already comes from water sources.
With this digital project, Kyrgyzistan shows the world that it is ready for the future of money.
