Uzbekistan a cryptocurrency heaven.
President Shavkat Mirziyoev issued an order for foreign cryptocurrency exchanges operating in the country.
As per the document:
- Cryptocurrency-related income will not be taxed,
- Existing foreign currency regulations do not apply to licensed exchanges operating with cryptocurrencies and foreign fiat currencies,
- Existing securities and exchanges regulations do not apply to licensed cryptocurrency exchanges
Instead of existing regulations, the crypto trading businesses will come under a new set of rules, referred to as special normative acts. With these, it shows that the Uzbekistan government is welcoming cryptocurrency exchanges to set up operations in the country.
However, foreign entities can only get a license for a cryptocurrency exchange after they already have a subsidiary or other enterprises in Uzbekistan.
- Must have an authorized capital to support as much as 30,000 minimum wages (which amounts to roughly $700,000),
- An equivalent of 20,000 minimum wages to be reserved in a state-backed commercial bank,
- Servers must be located in Uzbekistan,
- Require the exchanges to adhere to rules for trading and publishing exchanges rates based on a demand-and-supply ratio,
- Must utilize anti-money laundering procedures for users by storing users’ identification, transactions and other KYC/AML-based data data for at least five years
The benefits extend to crypto mining industry
For industrial miners using more than 100 kWh of power, are allocated land on”specially designated territories” without requiring an auction (which is normally required).
Uzbekistan economic reform efforts
Lower global commodity prices and economic slowdowns in neighboring Russia and China have hurt Uzbekistan’s trade and investment and worsened its foreign currency shortage. Aware of the need to improve the investment climate, the government is taking incremental steps to reform the business sector and address impediments to foreign investment in the country.
As a part of its economic reform efforts, the Uzbek Government is looking to expand opportunities for small and medium enterprises and prioritizes increasing foreign direct investment. In September 2017, the government devalued the official currency rate by almost 50% and announced the loosening of currency restrictions to eliminate the currency black market, increase access to hard currency, and boost investment.
In February, the government also announced their intention to create a state-funded innovation center for exploring the opportunities of blockchain in the state capital of Tashken, to boost its market-based economy.