From 1 May 2025, banks and exchange offices in Kyrgyzstan will be officially allowed to charge a commission for accepting and exchanging US dollars issued before 2006. These banknotes are often referred to as ‘white’ due to their outdated design and less pronounced security features. However, as Akchabar's analysis has shown, some commercial banks have not waited for the new rule to come into force and have already started charging interest on transactions involving such dollars.

According to the National Bank, the introduction of the commission is a necessary measure. It is explained by the need to compensate for the costs of removing old banknotes from the country, as well as to reduce the risks associated with the circulation of counterfeit currency. However, the logic raises questions: how exactly will additional commissions reduce the number of counterfeits if ‘white’ dollars continue to actively enter the country, especially after 2022?

It should be recalled that after the start of sanctions against Russia, including currency sanctions, a significant flow of old dollar bills flooded into Central Asian countries, particularly Kyrgyzstan. There are no accurate data on how many such bills are in the hands of citizens. However, it is known that by the end of 2006, Kyrgyz citizens had deposited the equivalent of 11 billion 35.7 million KGS in old dollars in banks, which at the exchange rate at that time (38.1238 KGS) amounted to $289.5 million. Since then, this amount has likely increased by tens of millions.

It is important to note that old dollars remain legal tender in the United States and have not been withdrawn from circulation by the Federal Reserve System. Nevertheless, starting from 1 May, the costs of transactions with old dollars will be borne not only by banks, but by all of us. Moreover, each bank will set the size of this commission independently — the National Bank of the Kyrgyz Republic does not regulate this issue by law. Thus, even at a rate of 1% (which is what some commercial banks have announced), the fees on the ‘white’ dollars held by Kyrgyz citizens at the end of 2006 alone could amount to almost $3 million. And this is without taking into account how many such banknotes have entered the country in recent years.

To be fair, it should be said that even before the introduction of the white dollar, there were difficulties. Banks and exchange offices were reluctant to accept them, set less favourable exchange rates, and some FCOs, without waiting for the regulator's order, arbitrarily introduced a commission for working with this currency. A survey of bank call centres conducted by Akchabar showed that at least five of them already charge a commission for transactions with ‘white’ dollars. Another reported a special exchange rate for such banknotes.

At the same time, the National Bank has clearly stated its position: commissions for exchanging old-style dollars (issued before 2006) that have not lost their status as a means of payment will only be allowed from 1 May 2025.

‘Until that date, there is a direct ban on setting different exchange rates or commissions depending on the year of issue of the banknote. Any commissions for exchanging such dollars charged before 1 May are not in accordance with the law,’ the National Bank of the Kyrgyz Republic commented to our publication, emphasising that appropriate measures will be taken against violators (if identified).

It is important to note that this does not apply to fees for accepting genuinely worn or damaged banknotes (of any year of issue) or commissions for other banking operations, such as account replenishment or money transfers — banks are free to set these themselves.