On 4 December 2025, the city of Manas hosted an expanded meeting of the Regional Investment Council of Jalal-Abad Province, chaired by Nurlan Ermatov, First Deputy Plenipotentiary Representative of the President of the Kyrgyz Republic in Jalal-Abad Province.

The discussion focused on the region’s growing need to accelerate economic development and reduce administrative barriers that continue to limit private-sector activity. The meeting demonstrated a shared readiness of government and business to jointly advance strategic initiatives capable of strengthening the province’s economic potential.

PPP Projects: New Development Opportunities for Jalal-Abad Province

One of the central agenda items was the review of a proposed PPP project on establishing a trout-farming cluster at the Kurpsai Reservoir.
Participants also considered a PPP initiative to develop an integrated sturgeon-production cluster at the Toktogul Reservoir.

The Center for Public-Private Partnership was represented by Abdu-Salam Tayirov, Head of the PPP Project Promotion and Implementation Department. Senior PPP expert of the Center and PPP expert of the Regional Investment Council for Jalal-Abad Province, Karina Baktybekova, outlined the key approaches to supporting PPP initiatives.

She emphasized that a PPP agreement serves as a reliable guarantee for both the investor and the public partner, noting that the Center’s support continues well beyond the signing of the contract. This includes ongoing monitoring, advisory services, and assistance in resolving operational issues — an approach that reduces investment risks, strengthens trust in the PPP mechanism, and helps ensure sustainable project outcomes.

Administrative Barriers: Improving the Excise Stamp Issuance Process

Particular attention was given to administrative challenges faced by SMEs, specifically the procedures for obtaining excise stamps.
Legal expert of the RIC for Jalal-Abad Province, Aizat Birimkulova, presented an analysis of the current process and proposed ways to streamline and modernize it. She noted that improving the procedure would accelerate processing, enhance transparency, and create better conditions for doing business.

Key Takeaways

The meeting underscored that advancing PPP projects in the fisheries sector, together with optimizing administrative procedures, provides three strategic advantages for the region:

1. more efficient use of water resources;
2. expansion of export potential;
3. a more predictable and business-friendly regulatory environment.

Participants expressed confidence that the combined efforts of the public and private sectors will strengthen the investment climate and support sustainable socio-economic development across Jalal-Abad Province.

At the practical forum “Eurobond Issuance: From Theory to Practice,” held on 2 December in Bishkek, a dedicated panel session on “Investments and International Capital Markets” brought together representatives of the Ministry of Economy and Commerce of the Kyrgyz Republic, the investment community, international partners, and the Business Development and Investments Council under the Cabinet of Ministers of the Kyrgyz Republic.

Speaking at the session, Uluk Kydyrbaev, Head of the Secretariat of the Council, emphasized that the role of the Council extends far beyond facilitating discussions on the investment agenda. Its core mission is to build a resilient and predictable architecture for capital mobilization — from establishing clear and stable rules for businesses and strengthening investor protection to shaping a portfolio of high-quality projects attractive to international markets.

He highlighted that, following the Kyrgyz Republic’s successful debut sovereign Eurobond issuance, the next strategic priority is to create the conditions for the country’s major corporates and financial institutions to access global capital markets in a structured and prepared manner.

The session also examined investor expectations and the growing demand for transparency, including high-quality reporting, clear debt strategies, ESG integration, and systematic risk management. In this context, Elena Eliseenko, Head of Commercial Operations for CIS, Central and Eastern Europe at S&P Global Ratings, underscored the importance of a consistent credit history, predictable government policy, and open communication between issuers and the market.

Participants discussed the institutional steps required to build a sustainable corporate debt market in the Kyrgyz Republic, including:

• development of the domestic capital market;
• improvement of the regulatory environment;
• strengthening the role of national financial institutions;
• expanding cooperation with international financial organizations.

Following the discussion, the Secretariat of the Council reaffirmed its readiness to continue serving as a key institutional bridge between the government, the private sector, and international investors — helping shape clear investment rules, advancing high-quality projects, and ensuring that the entry of Kyrgyz companies into international capital markets becomes a well-prepared and natural progression, rather than a one-off initiative.

On 2 December, the Business Development and Investments Council under the Cabinet of Ministers of the Kyrgyz Republic, together with its partners, held the first specialised practical forum in Bishkek titled “Eurobond Issuance: From Theory to Practice.”
The event served as an important platform for discussing concrete steps to support Kyrgyz companies and financial institutions in entering international capital markets and shaping a full-fledged external borrowing framework for the Kyrgyz Republic.

The forum brought together representatives of government bodies, financial institutions, major national companies, and international advisers. Participants examined in detail the essential components of preparing for a Eurobond issuance, including internal corporate procedures, foreign regulatory requirements, engagement with rating agencies, disclosure standards, and modern approaches to risk management.

In his opening remarks, Uluk Kydyrbaev, Head of the Secretariat of the Council, noted:
“The Kyrgyz Republic has significant potential for corporate sector growth and attracting external capital. To unlock this potential, we must continue reforms, strengthen the role of the private sector, expand access to new financing instruments, and create an environment in which investors can operate with confidence.”

Developing the Eurobond market is viewed as a strategic priority for diversifying financing sources, supporting large-scale investment projects, and strengthening international investor confidence in the Kyrgyz Republic.

As a result of the discussions, participants formed a consolidated understanding of the next steps required both from potential issuers and from state institutions. The insights and recommendations generated during the forum will be used by the Council in improving the regulatory framework, advancing market infrastructure, and deepening cooperation with international financial institutions and investors.

The Council will continue to serve as a reliable institutional platform where international expertise aligns with the practical needs of domestic businesses and government stakeholders. Through strengthened dialogue and the development of modern capital-raising tools, the Council contributes to increasing investment inflows and creating conditions for accelerated socio-economic growth of the Kyrgyz Republic.

In recent years, stablecoins have moved far beyond being an exotic product of the crypto market. They have effectively become a standard tool for payments, value storage, and a key element of the infrastructure used by exchanges, DeFi platforms, and payment services.

Their core idea is straightforward: to provide users with a digital instrument whose value is closely pegged to a clear underlying asset – most often the US dollar or another fiat currency, and in some cases gold or a basket of assets. For businesses, this is a way to make payments faster and cheaper. For retail users, it is a way to reduce exposure to the volatility of traditional cryptocurrencies.

In parallel, a broader trend is taking shape – the tokenization of real-world assets (Real World Assets, RWA). This involves moving not only money, but also real estate, debt instruments, commodity assets and other familiar financial instruments into digital form.

Against this backdrop, it is logical to look at both the global market and how the Kyrgyz Republic positions itself within it. This article provides a general overview, complemented by expert commentary from Temir Kazybay, Chair of the Association of Virtual Asset Market Participants (AURVA).

Stablecoin Models: Which Designs Appear More Resilient?

In current practice, several main approaches to structuring stablecoins can be distinguished: fully fiat-backed models, crypto-collateralized models, algorithmic designs, and hybrid structures. After a period of experimentation with different schemes, the market has clearly shifted towards more conservative designs, where the nature of the backing and the legal framework are transparent and understandable.

The position of the professional community is well reflected in Temir Kazybay’s answer to the question of which stablecoin models he considers the most resilient.

Which types of stablecoin backing do you consider the most resilient? What are their strengths and weaknesses?

“I consider the most resilient those stablecoin models that have achieved a balance between technological efficiency and legal reliability, which in today’s environment means two types:

Strictly regulated fiat-backed stablecoins (for example, USDC). Their strength lies in a maximum peg to a fiat currency (1:1), which ensures low volatility. Their weakness is a high level of custodial and regulatory risk, since users must fully trust the centralized issuer, its financial integrity, and its compliance with stringent global standards (for example, MiCA).

Hybrid models (partially backed). After the collapse of purely algorithmic systems, the market shifted to hybrid designs. Their strength is that they combine partial backing (by crypto or fiat assets) with algorithmic mechanisms. This provides greater decentralization than fiat models, while at the same time reducing the risks inherent in fully unbacked systems. Hybrid stablecoins demonstrate the highest practical resilience in conditions of market shocks.

A key factor for resilience is not only the quality of the backing, but also liquidity on the secondary market. In the absence of sufficient liquidity, even a perfectly backed stablecoin can lose its peg (de-peg) and become vulnerable to manipulation.”

In practical terms, this means the following. First, investors and regulators today are interested not only in the formal fact that “there is backing”, but in its structure, the quality of the underlying assets, and how easily liquidity can be accessed. Second, confidence in the issuer and in the jurisdiction in which it operates becomes at least as important as the technology itself.

Tokenization and International Trends: From Speculation to an Institutional Market

The global virtual asset market is gradually moving out of a phase of purely speculative interest and entering a stage of institutional adoption. Large funds, banks and corporates are entering this space, while regulators are developing dedicated regimes for working with digital assets and stablecoins.

The key trends of the current phase are described in detail by Temir Kazybay.

In your view, how is the global market for tokenization and virtual assets developing? Which trends are currently the most significant?

“The global market is going through a phase of institutionalization and maturation. We are seeing a fundamental shift from the speculative interest that characterized previous cycles, towards acceptance by large, conservative players.

Two trends are particularly significant:

Institutional Adoption. Large investment funds, banks and corporate treasuries are actively entering the sector through regulated financial instruments such as ETFs on digital assets. This inflow of ‘sticky’ capital reduces historic volatility and increases overall market stability.

Tokenization of Real Assets (RWA Tokenization). This is the most explosive and transformative trend. RWA tokenization converts traditional assets (real estate, bonds, receivables) into digital tokens, making them liquid and available 24/7. Forecasts indicate that this market could grow to USD 9.43 trillion by 2030. Institutional investors are already actively tokenizing US Treasury obligations, which reflects a high level of trust in this technology. At the same time, the success of RWA depends on the creation of reliable legal structures (SPVs) and the introduction of technological standards with embedded compliance (for example, ERC-7518) to meet global regulatory requirements.”

In other words, tokenization of real assets is no longer a theoretical scenario but an emerging segment of the global capital market. At its core are legal structures (such as SPVs), clear investor rights and protection in case of default, robust compliance standards and predictable regulation across jurisdictions.

Kyrgyz Republic: Legal Framework, USDKG and Market Development Challenges

The Kyrgyz Republic is one of the few countries in the region where virtual assets are regulated by a dedicated law. The Law of the Kyrgyz Republic “On Virtual Assets” has legalized the circulation of such instruments, defined the main types of activities (mining, issuance and circulation of virtual assets, services of VASPs), and introduced licensing for exchanges, exchange points and other service providers.

Building on this framework, the launch of the gold-backed stablecoin USDKG became the next important step. Its issuance is carried out by a company with state participation, while operational management has been delegated to the private sector. The instrument is presented as part of the country’s financial infrastructure and a potential mechanism for settlements, including at the regional level.

At the same time, the market is still forming and remains highly sensitive to reputational risks. The experience with MCN Coin, where citizens suffered significant losses, has clearly demonstrated how important it is to distinguish between licensed, regulated projects and initiatives without a transparent legal basis.

In this context, it is particularly important to understand how the expert community assesses the current situation and the next steps.

How would you assess the current situation on the digital asset market in the Kyrgyz Republic? What steps have already been taken and what still needs to be done?

“Kyrgyzstan has taken up a strategically advantageous position in Central Asia.

The following steps have been taken:

A Legal Framework Has Been Created. The Law of the Kyrgyz Republic ‘On Virtual Assets’ (2022) was adopted, which legalized the circulation of virtual assets and introduced mandatory licensing for virtual asset service providers (VASPs), including crypto exchanges and exchange offices. This creates a civilized legal environment.

USDKG Has Been Launched. The issuance of the state-supported stablecoin USDKG, backed by gold, is a landmark step. Issuance with state participation ensures a maximum level of institutional trust, while operational management by the private sector preserves flexibility. USDKG is positioned as an important instrument for regional settlements.

What remains to be done:

Strengthen Compliance and Supervision. It is necessary to set out in detail and effectively implement AML/KYC requirements, aligning national norms with international FATF standards. This is a key step in countering the shadow market and increasing the confidence of international partners.

Eliminate Regulatory Gaps. The legislation needs to be further developed in terms of taxation of operations with virtual assets and mechanisms for investor protection. A clear and balanced tax regime is a direct incentive for capital legalization.

Stimulate Innovation. Regulatory sandboxes are needed to test RWA tokenization projects, which will allow Kyrgyzstan to move from simply regulating cryptocurrencies to the genuine digitalization of the economy.”

In summary, the country already has three key elements in place: a basic law, a transparent state-backed stablecoin structure, and institutional players. However, sustainable market growth will require finalizing the tax regime, strengthening investor protection and ensuring that AML/KYC requirements are implemented in practice, not only on paper.

The Role of AURVA: Standards, Awareness and Dialogue with the State

A second important layer of the ecosystem is self-regulation. The virtual asset market is evolving very quickly, and this creates room for misuse and fraudulent schemes.

In this configuration, the Association of Virtual Asset Market Participants acts as an intermediary between business and the regulator, and as a driver of sectoral standards.

What is the role of AURVA in shaping a safe and well-regulated ecosystem? What priorities does the Association pursue?

“The role of AURVA is critically important as a link between the regulator (the State Financial Regulation Service, the National Bank) and market participants. We not only represent the interests of business, but also advocate for self-regulation and higher standards in the industry.

The Association’s priorities are as follows:

Standardization and Transparency. Developing and implementing sectoral codes of conduct and internal AML/KYC standards for licensed VASPs that not only meet, but exceed minimum legislative requirements. Our goal is to make Kyrgyz VASPs a regional benchmark for transparency.

Education and Protection. Carrying out active work to improve financial literacy and explain the legal difference between licensed (safe) and illegal (fraudulent) schemes. Only an informed investor can ensure the long-term health of the market.

Strategic Development. Cooperating with government bodies on a roadmap for RWA tokenization, as well as proposing balanced regulatory and tax solutions that encourage, rather than hinder, the legal growth of the sector.”

Taken together, this means that AURVA effectively acts as a “quality filter” on the market: it promotes higher standards among participants, helps citizens understand the distinction between legitimate and fraudulent schemes, and works with the state not only on classic cryptocurrency issues, but also on a strategy for tokenization of real assets.

Conclusion

Today, the Kyrgyz Republic is at an early, yet promising stage in the development of its stablecoin and virtual asset market.

On the one hand, the country already has important starting conditions in place: a dedicated law, a developing VASP infrastructure, the launch of the gold-backed stablecoin USDKG and a professional community. On the other hand, the market is still relatively small and vulnerable to negative cases, while many important questions – from taxation to investor protection mechanisms – require further refinement in practice.

In the Kyrgyz context, stablecoins and tokenization are not tools for short-term speculation, but potential building blocks of a new financial architecture: for more convenient settlements, for attracting capital into the country’s real assets, and for deeper integration of the Kyrgyz Republic into global value chains.

How far this potential is realized will largely depend on whether three elements can be combined: stable and predictable regulation, technological development of the infrastructure, and responsible behaviour by market participants.