Uzbekistan Legalizes Crypto Exchanges In New Decree

News, Regulation | September 7, 2018 By:

A new decree legalizing the activities of crypto exchanges has been signed by Uzbekistan’s President Shavkat Mirziyoyev.

According to a document published on the official government website, the president signed the decree “on measures to organize the activities of crypto exchanges in Uzbekistan” on September 2, which defines cryptocurrencies as a set of records in a blockchain that has value and owner. The decree states that companies that offers cryptocurrencies and foreign fiat currencies are not subject to existing foreign currency regulations and won’t be covered by the legislation that currently applies to securities and the activities of traditional exchanges.

The National Agency for Project Management, a licensing body under the president, will be in charge of reviewing and approving crypto exchange licences. The licensing body will ensure compliance in regards to money laundering and terrorism financing. The decree notes that foreign entities will need to open a subsidiary in the country to get a license.

To be eligible for a license, entities must have an authorized capital of no less than 30,000 times the average minimum salary, which amounts to roughly $700,000. Entities are also required to have the equivalent of 20,000 minimum wages in a separate Uzbekistan commercial bank. Authorized trading servers within Uzbekistan are also required and applicants must agree to store user data for up to five years.

The decree also states that entities operating a crypto exchange will be exempt from taxation and revenues from crypto transactions will not be included in the base income used to calculate taxes and other mandatory payments. For crypto miners, the decre orders local government officials to provide miners using more than 100 kWh of power with land without requiring an auction on “specially designated territories.”

The news came after the president signed an order “On measures for digital economics development in the Republic of Uzbekistan” in Juy of this year. The decree calls for the implementation of blockchain and smart contracts to diversify the various approaches related to investment and entrepreneurial operations.