As the price of bitcoin actively moves up, the number of crypto supporters increases. One by one, the countries of the world are developing and implementing the rules of legislative regulation of the digital currency sphere. Uzbekistan is no exception, but it has its own peculiarities. Cryptocurrency is allowed on the territory of the country, but transactions with it are limited.
The legislative framework of Uzbekistan in terms of cryptocurrency
Currently, the Presidential Decrees “On measures for the development of the digital economy in the Republic of Uzbekistan” dated 03.07.2018 and “On measures for the organization of the activities of crypto exchanges in the Republic of Uzbekistan” dated 02.09.2018 are in force in the cryptocurrency industry.
The amendments to the Law “On Countering the legalization of Proceeds from criminal activities, the financing of terrorism and the financing of the proliferation of weapons of Mass Destruction” are also being considered. The document is planned to be supplemented with a norm stating that persons engaged in crypto activities (turnover of digital currency) should be included in the list of organizations that conduct transactions with money or other property.
The officials’ plans include the creation of a Regulatory Sandbox for the development of digital technologies. Its name sounds like “Uzbekistan Blockchain Valley”. The National Agency for Project Management intends to take part in its creation. But for now, this remains only at the level of discussions.
Purchase and sale of cryptoassets
In 2020, the first local cryptocurrency exchange began operating in Uzbekistan. It has a license to operate. Since transactions related to the turnover of digital assets are also subject to licensing, they can be carried out in Uzbekistan only through this enterprise. But the exchange only allows foreigners to sell the mined cryptocurrency.
Cryptocurrency cannot be purchased in Uzbekistan, since the exchange does not provide such a service. This is explained by the fact that the local population has low financial literacy. Such transactions can cause significant damage to the state economy. At the same time, if crypto trading is carried out bypassing the exchange, it is recognized as a crime.
Tariffs and legalization
Since it is impossible to purchase cryptocurrency on the territory of the Republic of Uzbekistan, local crypto enthusiasts are actively engaged in its mining. Due to the activation of such a process, in the spring of last year, such entrepreneurs were going to be obliged to pay for the electricity used at increased tariffs.
The miners did not have time to argue, as the officials’ plans collapsed. The problem arose in the development of a procedure for determining energy consumers involved in cryptocurrency mining specifically. Accordingly, it was impossible to apply the increased tariffs. Then the Uzbek authorities intended to legalize the miners. For this purpose, a plan was developed to create a mining pool, which was to be called Uzbekistan Cryptocurrency Mining Pool. Legalization consisted in mandatory membership in this community. But the relevant legislative act has not yet been adopted. It is known that some local crypto enthusiasts still buy digital currency by detours. However, most are still only engaged in mining. The most popular cryptocurrency in Uzbekistan is bitcoin. In second place is the XRP token, and in third place is Ethereum. Altcoins are also gaining momentum, with the exception of stablecoins, whose exchange rate is pegged to the US dollar.