Kyrgyzstan’s central bank has suspended cross-border transactions on the SWIFT financial network amid revolts over the country’s controversial parliamentary elections.
The official representative of the National Bank of Kyrgyzstan, Aida Karabeva, announced the temporary suspension of SWIFT in Kyrgyzstan in a statement on October 7.
According to Karapeva, the bank decided to suspend SWIFT transactions to prevent capital outflows from the state and to ensure the security of its assets. The management said that the bank plans to resume SWIFT operations when the situation in the country stabilizes:
“Measures are necessary to ensure the security and integrity of the system. The National Bank is monitoring the situation, and since it is stable, the banking system will resume its operations in a normal situation.”
Karabayeva’s statement relates to the Kyrgyz Central Bank’s recommendation to local financial institutions to suspend their activities due to the difficult political situation. On October 7, the Kyrgyz National Bank issued an official statement urging commercial banks and creditors in Kyrgyzstan to cease their operations:
“To ensure the security of the country’s financial and banking sector and to preserve the assets of financial and credit institutions, the Kyrgyz National Bank recommends commercial banks and non-banking financial institutions to stop work from October 7 and to strengthen security measures until a political situation develops. The country stabilizes.”
The measures came amid violent protests that began on October 5 in response to parliamentary elections in Kyrgyzstan, which protesters deemed unfair. After mass protests, local electoral authorities canceled the election results for October 6.
Kyrgyzstan is just another example of the shortcomings of the traditional banking system compared to the digital currency industry. Unlike traditional banks, large cryptocurrencies like Bitcoin (BTC) do not have a central party that decides the fate of users’ money.