Kyrgyzstan's Crypto Dilemma: Navigating Sanctions and Sovereignty

Kyrgyzstan President Sadyr Japarov appeals to U.S. and UK after crypto sanctions target Kyrgyz networks. London sanctioned crypto linked to Russia evasion. Japarov denies local banks' involvement, insists on state's control over rouble trading. U.S. still sanctioned Keremet Bank for alleged sanctions dodging.

Kyrgyzstan's President Sadyr Japarov has reached out to the United States and Britain's top leadership, following London's recent decision to impose sanctions on Kyrgyz crypto networks allegedly facilitating Russian sanctions evasion. London had unveiled sanctions targeting the rouble-pegged stablecoin A7A5, reportedly moving $9.3 billion in just four months.

Several entities, including Grinex LLC and Old Vector LLC, were implicated alongside a Luxembourg-based firm for facilitating illicit activities. Washington had already sanctioned these entities, citing their role in sanctions evasion. Japarov refuted claims of Kyrgyz banks participating in any such illegal infrastructure.

In a bid to prevent further complications, Kyrgyzstan now limits rouble operations strictly to the state-owned Keremet Bank, which is monitored and profits directed into the state budget. Despite this, the U.S. had sanctioned Keremet Bank in January, criticizing it for aiding Moscow through trade payments. President Japarov maintains a commitment to international compliance while safeguarding national economic interests.

(With inputs from agencies.)