The government of Uzbekistan has moved to expand its crypto regulations through a decree signed by President Shavkat Mirziyoyev. The document provides definitions for terms like crypto assets, exchange, and mining, and determines the main regulatory body for the industry.
An agency headed by President Mirziyoyev to oversee the crypto market in Uzbekistan
Uzbek head of state Shavkat Mirziyoyev has signed a new decree expanding the regulatory framework for the Central Asian nation’s crypto space. Its stated objective is to further develop digital technologies, create favorable conditions for entrepreneurship and improve legislation in this area.
The National Agency for Project Management under the president has been transformed into National Agency for Perspective Projects, Forklog reported, quoting the document. The NAPP will become the country’s main crypto watchdog.
The regulatory body was tasked with implementing state policy in the crypto-economy and ensuring the protection of investors’ rights. He will also be responsible for bringing blockchain technologies to the public sector and combating money laundering, terrorist financing and weapons proliferation via cryptocurrencies.
The decree defines crypto assets as property rights representing a collection of digital records in a distributed ledger that have value and owner. Starting from Jan. 1, 2023, Uzbekistan’s citizens and companies will be allowed to buy, sell and exchange cryptocurrencies through crypto service providers.
The president’s order lists a number of entities that fall into this category, including digital asset exchanges, mining pools, crypto custodians, and crypto stores. They will need to register as local businesses and obtain mining licenses or certificates from the government agency.
Uzbekistan legalized crypto trading in 2018 but in late 2019 the government banned local residents from purchasing cryptocurrencies. They could only sell. In November, 2021, citizens were allowed to trade crypto assets for national currency on licensed domestic crypto exchanges while non-residents were permitted to exchange digital coins for foreign fiat.
Executive Order Prohibits Unauthorized Mining and Minting of “Anonymous” Cryptos
Only registered companies will be able to mine cryptocurrency in Uzbekistan. Mining farms will pay a higher electricity rate during peak consumption hours. Unauthorized mining will be prohibited. The ban also applies to the minting of what the decree calls “anonymous cryptocurrencies” and any transactions with them.
Just as before, Uzbekistanis will not be permitted to use or accept cryptocurrencies as a means of payment for goods and services within the country. On the positive side though, crypto-related transactions of individuals and companies will not be subject to taxation, according to the document dated April 27, 2022.
Tax breaks will also be granted to participants in a new regulatory sandbox that NAPP will establish to pilot crypto projects. Entities involved in testing will also be exempt from other obligations to the state budget, including customs payments other than duties on imported hardware and software.
