Cryptocurrency Legalization in Uzbekistan

New Presidential Decree Will Hasten Cryptocurrency Legalization in Uzbekistan

A new decree signed by the President of Uzbekistan will encourage the integration and development of cryptocurrency and blockchain technology in the country.

On July 3, Uzbekistan president Shavkat Mirziyoyev signed a decree to advance efforts toward building a digital economy that embraces blockchain technology and the mining, trading, issuance and adoption of cryptocurrencies.

The decree, titled “On measures for digital economics development in the Republic of Uzbekistan’, calls for a number of key tasks to propel the country in advancing to a digital economy, including the development of a legal framework to recognize and legalize the blockchain and crypto sector.

The presidential decree also outlines a hugely favorable tax position for the cryptocurrency sector that will benefit regulated companies and individual investors alike.

A translated excerpt from the presidential decree reads:

"The operations of legal entities and individuals related to the turnover [transactions] of crypto-assets, including those carried out by non-residents, are not taxable, and the revenues received from these transactions are not included in the base [foundation] for taxes and other mandatory payments."

A handful of the other mandates from the presidential document includes:

• The adoption and development of the cryptocurrency sector including mining, issuance, distribution, insurance and crowdfunding activities.
• Training qualified personnel to develop and implement the use of blockchain technology in the public sector.
• Comprehensive coordination with international organizations and authorities in the field of crypto assets and blockchain technology.
• Creating the necessary legal framework to introduce blockchain technology.

Curiously, the decree has also tasked hydroelectric power providers JSC Uzbekenergo and UzbekHydroEnergo to launch ‘a pilot project based on the elements of the digital economy and activities on crypto-active assets (including mining) within a three-month period,’ a translated excerpt from a local news report added.

The country’s National Project Management Agency (NAPU) – a recently established government body under the President’s office – will spearhead the effort to implement and develop Uzbekistan’s digital economy initiative. The body will have a major say in the creation of a legal framework and will also specify the applications of blockchain technology in the public sector.

Further, NAPU and the Ministry of Development of Information Technologies and Communication (Mininfocom) will also be tasked to plan, outline and implement the blockchain development program with a 2020 deadline. The decree has called on government agencies to adopt blockchain technology for activities including data verification, maintenance of state registers, corporate governance and more. The broad initiative draws parallels to a similar sweeping strategy in Dubai, where the government intends to place all its documents on a blockchain by 2020.

The Uzbekistan presidential decree comes in the heels of legislative proceedings in Malta, now among the earliest countries to legally recognize and embrace the crypto and blockchain-sector after passing three bills this week.

Featured image from Shutterstock.