The government of Uzbekistan has decided to expand its crypto regulation through a decree signed by President Shavkat Mirziyoyev. The document provides definitions of terms such as crypto-assets, exchange and mining, and identifies the industry’s primary regulator.
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. The stated aim 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 the National Agency for Perspective Projects, Forklog reported, citing the document. The NAPP will become the country’s leading crypto watchdog.
The regulatory body is tasked with implementing state policies 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 fighting money laundering, terrorist financing and weapons proliferation through cryptocurrencies.
The executive order defines crypto-assets as ownership rights that represent a collection of digital records in a distributed ledger that have value and an owner. From January 1, 2023, Uzbek citizens and businesses will be allowed to buy, sell and trade 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 must register as local companies and obtain mining permits or certificates from the government agency.
Uzbekistan legalized crypto trading in 2018, but in late 2019 the government banned local residents from buying cryptocurrencies. They could only sell. In November 2021, citizens were allowed to trade crypto assets for domestic currencies on licensed domestic crypto exchanges, while non-residents were allowed to trade digital coins for foreign fiat.
Executive Order Bans Unauthorized Mining & Extraction of “Anonymous” Cryptos
Only registered companies can mine cryptocurrency in Uzbekistan. Mining companies will pay a higher electricity rate during peak hours. Unauthorized mining will be banned. The ban also applies to minting what the decree calls “anonymous cryptocurrencies” and all transactions with them.
As before, Uzbeks are not allowed to use or accept cryptocurrencies as payment for goods and services in the country. On the plus side, however, crypto-related transactions by individuals and companies are not subject to tax, according to the April 27, 2022 document.
Tax breaks will also be granted to participants in a new regulatory sandbox that NAPP will set up to test crypto projects. Entities involved in the testing will also be released from other obligations to the state budget, including customs payments other than import duties on imported hardware and software.
What do you think of Uzbekistan’s new crypto regulations? Let us know in the comments below.
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