The executive power in Uzbekistan has advanced towards legalizing cryptocurrencies and implementing blockchain technology in both government and economy. A new decree signed by President Mirziyoyev mandates licensing for trading and other activities related to the circulation of digital coins. The document also calls for regulating crypto mining and smart contracts.
Preparing the Legal Ground for Crypto Activities
Following in the footsteps of Belarus, Uzbekistan – another former Soviet republic – has taken steps to legalize its crypto sector as part of the efforts by the government in Tashkent to boost the country’s development through innovation. President Shavkat Mirziyoyev has issued a special decree that will help prepare the legal ground for the implementation of blockchain technologies, the circulation of cryptocurrencies, and the regulation of mining.
The document, “On measures for the development of the digital economy in the Republic of Uzbekistan,” was signed on Tuesday and published on July 4. Decree №ПП-3832, which enters into force with its publication, notes that the technologies of blockchain, artificial intelligence, supercomputers, as well as the activities related to crypto assets are some of the main directions for digital development in many countries around the world.
Uzbekistan’s head of state has marked several tasks to further the development of the digital economy, the improvement of government systems and the creation of conditions for innovations in his country. Topping Mirziyoyev’s list is the introduction and expansion of activities related to the circulation of crypto assets, mining, smart-contracts, crowdfunding and blockchain technologies that can diversify investment and entrepreneurship. Some of these terms have been given proper definitions.
The decree also states that currency operations conducted by corporate entities and natural persons, including non-residents, related to the circulation of crypto assets, are not subject to taxation, and incomes received from such operations are not part of the taxable base. Also, crypto transactions by licensed entities will not be governed by the provisions of the regular currency law, according to the president.
Introducing Licensing for Crypto Exchanges
Advancing towards legalizing and regulating the sector, the presidential decree mandates the introduction of a licensing regime for activities related to the circulation of crypto assets. Newly created trading platforms will be issued licenses starting from October 1. The government body charged with overseeing licensing is the National Agency for Project Management under the Presidential administration.
NAPM and Mininfocom, Uzbekistan’s IT and telecom ministry, have been tasked to develop proposals on creating conditions for the development of the crypto space and present draft amendments regarding the licensing regime within two months. Both institutions should also prepare and offer for discussions a draft law “On digital economy and blockchain technologies” by January 1, 2019. Prime Minister Abdulla Aripov has been charged with overseeing the implementation of the presidential decree.
The legal basis will be developed in close interaction between the state and the private sector. As part of the efforts to digitize the country, Uzbekistani authorities also want to organize training courses for blockchain professionals in cooperation with foreign organizations and experts. The Central Asian republic plans to implement blockchain in government procurements, services, registries and data bases, as well as in the corporate management of the large state-controlled enterprises, in clearing operations, payment processing, financing and fundraising. All this is supposed to happen by January 1, 2021.
Behind Schedule on Crypto Regulation
Uzbekistan is actually falling behind its own schedule for introducing crypto regulations. In another decree issued in February, President Mirziyoyev stated that government institutions should finalize a draft law to legally regulate “electronic money” by September 1, as news.Bitcoin.com reported. Mirziyoyev also ordered respective authorities to set up a special Center for Distributed Ledger Technologies within Uzbekistan’s Mirzo Ulugbek Innovation Center.
Opinions on cryptocurrencies in Tashkent, as well as in the neighboring Central Asian capitals, have gradually changed over time and become more positive. Initial warnings about the risks and the possible illicit uses have given way to declarations of support for the implementation of crypto technologies. Kyrgyzstan has announced intentions to introduce crypto payments in public projects, while in Kazakhstan, interest in cryptocurrencies has increased fifteen-fold over the past year.
Do you expect Uzbekistan to quickly legalize cryptocurrencies and crypto activities? Tell us in the comments section below.
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