Kyrgyzstan’s crypto market yields more tax revenue than its largest bazaar

The cryptocurrency market brings Kyrgyzstan more tax money than the country’s largest bazaar and all patent-paying businesses put together.

The calculation comes amid efforts to update the nation’s crypto regulations and threats of penalties over its role in Russia’s sanctions evasion through crypto.

Kyrgyz crypto industry pays nearly $23 million in annual taxes

Kyrgyzstan’s nascent market for digital assets has quickly become one of its fastest-growing economic sectors, regional media noted this week.

In the first three quarters of 2025, its turnover surpassed $7.9 billion, and industry watchers are convinced there’s room for further growth.

Official data revealed that the total volume of Kyrgyz crypto transactions exceeded $20.5 billion last year, resulting in $22.8 million of tax income for the state.

According to Temir Kazybaev, Chairman of Kyrgyzstan’s Association of Virtual Asset Market Participants, tax revenue from the crypto business is already larger than that from the country’s largest trading hub for commodities and the total received from voluntary patent fees.

Speaking to the English-language Times of Central Asia, he elaborated:

Dordoi is a major wholesale and retail market in the Kyrgyz capital Bishkek, which is not only the largest in the country, but also one of Asia’s biggest public marketplaces.

Kazybaev highlighted the significant shift in public opinion about the industry in Kyrgyzstan, where most people viewed the crypto market as a scam or a pyramid scheme only a few years ago.

“That perception is changing. People and businesses now see it as an opportunity,” he said, emphasizing the role of the country’s President Sadyr Zhaparov in that regard.

The representative of the crypto sector also noted the positive trend in the development of the market’s infrastructure, providing another set of industry figures.

More than 200 cryptocurrency exchanges and 11 mining companies are currently registered in Kyrgyzstan, he detailed.

The head of the crypto association mentioned the recent launch of the gold-backed stablecoin USDKG as a boosting factor for the crypto space, acknowledging its growing recognition in the country.

“The development of virtual assets is a critical area … and our association is deeply involved” in it through educational events, he remarked, adding his organization is training compliance officers and accountants working in the crypto sphere.

Kyrgyzstan government upgrades country’s crypto regulations

The numbers signaling the growing significance of Kyrgyzstan’s crypto market come amid efforts to update the nation’s regulatory framework.

While cryptocurrency transactions have been legalized already, Bishkek is still working to enhance the rules, the Times of Central Asia pointed out.

Earlier in February, the media revealed that Kyrgyz authorities had added specific legal definitions for cryptocurrencies and stablecoins and regulated the state’s involvement in crypto mining.

A bill signed by President Zhaparov empowers his administration to determine the exact procedures for the issuance and circulation of digital assets.

The rules concern coins issued in Kyrgyzstan that are backed by other assets under the strict control of the government, such as the dollar-denominated USDKG and another stablecoin called KGST, which is tied to the Kyrgyz som, the national fiat currency.

Kyrgyzstan is becoming a stablecoin hotspot in its region. It’s also home to the largest non-dollar cryptocurrency of this kind, the Russian ruble-pegged A7A5, which has processed transactions worth over $100 billion in the first year since its launch in early 2025.

The coin, created by a Russian company but issued by a Kyrgyz-registered entity, has caused a lot of headaches for Bishkek lately due to its suspected use by Russia for sanctions evasion.

As a result of their alleged role in facilitating Russian crypto transactions, Kyrgyz financial institutions and crypto platforms have been sanctioned by the EU, the U.S., and the U.K.

The latest European package of punitive measures against Russia and its supporters is reportedly targeting two of Kyrgyzstan’s banks based on the same allegations.