The nation of Uzbekistan has by a new presidential decree legalized cryptocurrency trading with licences to be issued to crypto exchanges subsequent to meeting a set of requirements; notably exchanges who wish to operate in the country will have to establish local subsidiaries and abide by local laws.
President Shavkat Mirziyoyev who signed the decree is said to be focused on ways to boost the nation’s market economy hence, the turn to the growing and favourable initiatives of the cryptocurrency industry. By this decree, the former soviet nation will look to encourage the use of cryptocurrency and Blockchain technology in the country as well as attract the big wigs of the crypto industry into its shores.
Taking snippets from the contents of this new legislation, a few highlights include:
- Only Foreign legal entities with local subsidiaries or other enterprises will be permitted to open cryptocurrency exchanges in the country.
- These corporate entities, including private persons and non-residents will NOT be liable to pay taxes on their cryptocurrency turnovers and profits hence; any revenue derived in cryptocurrency will not be taxed.
- The decree does not treat cryptocurrency as securities which make them specifically free from security and traditional exchanges legislation, rather it places crypto as assets under special normative acts and defines them as a set of data records on Blockchain which have value and owner.
- Exchanges will solely determine their fees and are open to transact in either fiat or other digital coins with residents and non-residents.
However, the decree also specified a few rigid conditions to include: Exchanges must hold startup capital to cover for as much as 30,000 minimum wages on the day they apply for registration; with an equivalent of 20,000 minimum wages reserved in a state-based commercial bank (Note at this time Uzbekistan minimum wage stands at $185). Also, the crypto-exchanges are required to have built operational crypto-trading systems which MUST base their servers in the country, they shall adhere to rules for publishing exchange rates and must store transaction and user ID information for five years.
Extensively, the Presidential decree also legalized cryptocurrency mining and duly authorized state owned energy companies ‘Uzbekenergo’ and ‘Uzbekgidroenergo’ to allocate lands for crypto mining operations to cryptocurrency mining companies which will utilize the state’s energy resources provided by the National Project Management Agency, under the guidance of the Presidency.
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