Massive protests led to suspension of SWIFT, Kyrgyzstan banking activities

Kyrgyzstan has suspended the SWIFT system and recommended stopping banking activities until the severe political unrest in the country stabilizes. Massive protests erupted after parliamentary elections as the opposition stormed government buildings and forced the prime minister to resign.

Suspension of SWIFT and banking services

The National Bank of Kyrgyzstan announced on Wednesday that the SWIFT system has been suspended in the country as political unrest escalates. The central bank “also recommends that commercial banks and non-bank financial institutions suspend their activities and strengthen security measures until the political situation in the country stabilizes.”

The suspension of SWIFT and banking activities follows massive protests that erupted on Monday after elections in the capital Bishkek. Protesters clashed with security forces and broke into the parliament building and the presidential administration building. Opposition supporters seized government buildings on Tuesday and forced the cabinet to resign. Kyrgyz President Sooronbai Jeenbekov declared a state of emergency in Bishkek on Friday and said he was ready to step down once a new government was appointed.

An official representative of the National Bank of the Kyrgyz Republic, Aida Karabaeva, explained on Wednesday that the temporary suspension of SWIFT and banking activities is aimed at preventing capital outflows from the country, adding:

The measures taken are necessary to ensure the security of the system, the security of the assets. The National Bank is monitoring the situation and as it stabilizes the banking system will resume normal functioning.

According to the announcement: “The national payment system ‘Elcard’ continues to provide the ability to make non-cash payments. Payments and settlements can be made using payment tools other than cash and remotely: bank payment cards, electronic purses, Elcard Mobile application, QR codes, etc.

In addition, the head of the Union of Banks of Kyrgyzstan Anvar Abdraev said on Tuesday that ATMs had been disconnected and funds had been withdrawn from the machines to prevent operations and looting, Sputnik Kyrgyzstan news outlet reported. .

“For small businesses and private transactions, cryptocurrencies can be of great help,” experts say, but warn that “such a form of payment may not be acceptable to large businesses, especially those regulated. “The Forklog publication reported. In addition, the National Bank of Kyrgyzstan pointed out that cryptocurrencies do not have legal status even though their transactions exist in the country.

In August, Kyrgyzstan’s Ministry of Economy prepared a bill requiring minors to register with the country’s tax authorities and declare their activities. In June, parliament adopted the draft law “On Amendments to the Tax Code of the Kyrgyz Republic” at third reading. It offers a 15% tax rate for mining cryptocurrency.

What do you think of the situation in Kyrgyzstan? Let us know in the comments section below.

Image credits: Shutterstock, Pixabay, Wiki Commons, BBC

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Michael C. Sumner

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