Kyrgyzstan’s Central Bank is eyeing integrating e-currency ‘digital som ’ with traditional finance systems.
The ‘digital som’ will be integrated into the financial system, leveraging a unique software system solely operated by the Central Bank.
Nigeria launched its digital currency in 2021, known as the e-Naira; however, it has faced severe criticism due to its low adoption rate.
The advancement of blockchain has backed the growth of crypto assets globally; the surging adoption of cryptocurrencies has motivated many countries to develop their CBDCs (Central Bank Digital Currency).
As per recent information, Kyrgyzstan is actively engaged in the amendment of constitutional law to integrate its digital currency, known as digital som, into the nation’s traditional finance system.
The National Bank of Kyrgyzstan has initiated a public discussion over integrating its digital currency, intending to digitalize its economy. As per the filed amendment, the ‘digital som’ will be integrated into the financial system, leveraging a special software system solely operated by the Central Bank.
The integration proposal of ‘digital som’ does not highlight terms such as blockchain and distributed ledgers, although it highlights the term smart contracts. Still, there needs to be a more straightforward take on technicalities.
There will be a digital account and a digital wallet on the system, and the account will be managed by a platform operator for the participants.
As per further information, the wallet can be accessed using the application provided by the participating banks and financial institutions.
Nations Having Own Digital Currencies
Several countries have already launched their digital currencies; some of them are performing well, and others are depleting constantly. The Sand Dollar, the digital currency of the Bahamas, was launched in October 2020, having a value of 1:1 against the nation’s traditional currency.
Nigeria launched its digital currency in 2021, known as the e-Naira; however, it has faced severe criticism due to its low adoption rate and lack of transparency. Till August 2024, the number of inactive wallets holding e-naira grew significantly.
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