On October 7, 2020, the central bank of Kyrgyzstan disabled cross-border transactions on the SWIFT financial network. It acted amid widespread unrest over the nation’s disputed parliamentary elections. An official representative of the National Bank of the Kyrgyz Republic, Aida Karabaeva, said in a statement that there will be a temporary suspension of all SWIFT services in Kyrgyzstan.
The bank settled on suspending SWIFT transactions to prevent capital outflows from the nation as elaborated by Karabaeva. The move would ensure the safety of assets. The executive also alleged that the bank will resume SWIFT as soon as the situation in the nation 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.”
His statement comes simultaneously with Kyrgyzstan’s central bank recommending that all the local financial institutions must temporarily suspend all their activities due to the challenging political situation. The National Bank of the Kyrgyz Republic issued their authoritative statement urging all commercial banks and lenders operating within the country to stop 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.”
All these measures come as a result of the violent protests that started on October 5 while responding to Kyrgyzstan’s parliamentary elections. Protestors perceived these elections as unfair. Due to these widespread protests, the local electoral authorities nullified election results on October 6.
The country is just another example of the traditional banking services imperfections while compared to the cryptocurrency industry. Major cryptos like Bitcoin (BTC) have no central party to determine the fate of user funds as it is the case with traditional banks.