Participating startups will receive exemptions from tax obligations through a regulatory sandbox. The authorities will regard unlicensed mining farms as illegal and not allow them to operate on Uzbek territory.
Uzbek President Shavkat Mirziyoyev recently signed a new decree to expand the regulatory framework for cryptocurrencies in that Central Asian country. It aims to develop digital technologies further, create favorable conditions for startups, and improve the legislation for developing the crypto asset industry.
The National Agency for Prospective Projects (NAPP) will be responsible for controlling the cryptocurrency industry in the country by presidential order. That agency now has the task of implementing the state policy on the crypto asset economy and will ensure the protection of user rights.
The decree states that citizens and companies will be able to buy, sell and exchange cryptocurrencies through regulated service providers from January 1st, 2023.
According to the presidential order, crypto exchanges, Bitcoin mining pools, and other providers will have to register as local companies. They will also have to obtain mining licenses or certificates issued by the government agency to operate in the country.
The authorities will regard Bitcoin mining farms as illegal if they have no permission to operate on Uzbek territory. Meanwhile, the permitted digital mining companies will pay a higher electricity rate during peak consumption hours.
The country will grant tax exemptions to participating startups through a new regulatory sandbox the NAPP will establish to supervise cryptocurrency projects. Likewise, they will be free from paying other obligations such as customs payments for imported hardware and software.
Bitcoin Is Part of the Economic and Digital Transformation Agenda
The Uzbek government sees Bitcoin regulation as part of its strategy to accelerate socio-economic development and improve the life quality of the population. They focus on becoming a leading country in creating a favorable environment for introducing innovative digital solutions.
With some variants, the current legislation takes up the regulatory decree issued by the country in 2018. In December 2019, the authorities banned buying Bitcoin and other crypto assets through the existing crypto exchanges. However, they allowed those trading platforms to sell their cryptocurrency holdings.
The government created a national pool of miners where affiliates benefited from lower electricity rates. Uzbekistan also launched a licensed exchange, where miners had to sell their cryptocurrencies.
President Mirziyoyev currently has the task of creating favorable conditions for developing the private sector. He is also responsible for implementing measures to accelerate privatization and drive the economy.
In that sense, he recently signed the decree New Development Strategy of Uzbekistan for 2022-2026. He aims to achieve stable economic growth, increase economic competitiveness and reduce the participation of the State in the economy.
That presidential decree contains many turning points in many sectors and areas. Those changes will directly contribute to economic growth and investment attraction, favoring the cryptocurrency industry.
By Alexander Salazar
