The bank is shutting down the SWIFT network as protests rocked the country.
The central bank of Kyrgyzstan has disabled cross-border transactions on the SWIFT financial network amid widespread unrest over the country’s disputed parliamentary elections.
Aida Karabaeva, an official representative of the National Bank of the Kyrgyz Republic, announced a temporary suspension of SWIFT in Kyrgyzstan in a statement on Oct. 7.
According to Karabaeva, the bank decided to suspend SWIFT transactions in order to prevent capital outflows from the country and ensure the safety of assets. The executive claimed that the bank is planning to resume SWIFT transactions as soon as the situation in the country stabilizes:
“The measures taken are necessary to ensure security of the system and the safety of assets. The National Bank is monitoring the situation, and as it stabilizes, the banking system will resume operations in normal mode.”
Karabaeva’s statement comes in conjunction with Kyrgyzstan’s central bank recommending local financial institutions to temporarily suspend their activities due to the complicated political situation. On Oct. 7, the National Bank of the Kyrgyz Republic issued an official statement requesting commercial banks and lenders in Kyrgyzstan to halt operations:
“In order to ensure safety of the country’s financial and banking sector and to preserve assets of financial credit institutions, the National Bank of the Republic of Kyrgyzstan recommends that commercial banks and non-banking financial credit institutions suspend their work on October 7 and step up security measures until the political situation in the country stabilizes.”
These measures come amid violent protests that began on Oct. 5 in response to Kyrgyzstan’s parliamentary elections that were perceived by protestors as unfair. Following the massive protests, local electoral authorities annulled the election results on Oct. 6.
Kyrgyzstan is just another example of the traditional banking system’s imperfections in comparison to the crypto industry. In contrast to the traditional banks, major cryptocurrencies like Bitcoin (BTC) do not have a central party to decide the fate of user funds.
written by Helen Partz
Heiko Closhen, Entrepreneur