Source: Cointelegraph Original: "{title}"

Kyrgyzstan President Sadyr Zhaparov has signed a constitutional law authorizing the launch of a CBDC pilot project, while granting the "digital som"—the country's digital form of legal tender—legal tender status.

According to a statement from the presidential office on April 17, the law grants the National Bank of the Kyrgyz Republic exclusive authority to issue the digital som, establish its issuance and circulation rules, and oversee the platform on which the digital som operates.

However, according to local media outlet Trend News Agency, the final decision on whether to officially issue the CBDC is expected to be made by the end of 2026.

If the central bank decides to officially launch the digital som, it will also need to establish encryption protection measures to ensure the security of the digital som and prevent it from being used for fraudulent activities.

Testing of the digital som platform is expected to begin sometime this year.

Zhaparov's signing comes nearly a month after the Kyrgyz Parliament "Jogorku Kenesh" passed amendments to the constitutional law on March 18.

While CBDC projects are advancing globally, there are still many in the crypto community who are critical of them, expressing concerns that they may undermine financial privacy and encourage excessive government regulation.

According to data from cbdctracker.org, 115 countries have initiated CBDC-related projects, but only four have actually launched: the Bahamas' "Sand Dollar," Nigeria's e-Naira, Zimbabwe's ZiG, and Jamaica's JAM-DEX. Over 90 projects are still in the research phase and have not yet entered actual testing or issuance stages.

Kyrgyzstan Continues to Develop in the Crypto Space

Earlier this month, former Binance CEO Changpeng "CZ" Zhao announced that he would serve as an advisor to Kyrgyzstan, providing guidance on blockchain and cryptocurrency regulation. This collaboration was established after Zhao signed a memorandum of understanding with the country's foreign investment agency.

Zhaparov stated that this initiative would help promote economic development and the security of virtual assets, "creating new opportunities for businesses and society as a whole."

This mountainous and landlocked country is considered highly suitable for cryptocurrency mining due to its rich and underutilized renewable energy resources.

According to a report from the International Energy Agency, over 30% of Kyrgyzstan's energy supply comes from hydropower plants, but the country's hydropower potential is currently only about 10% developed.

Related: The collapse of Mantra's OM token exposes the "critical" liquidity issues in cryptocurrency.

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