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Uzbekistan Inches Closer to Cryptocurrency Legalization and Implementing Blockchain Technology in Both Government and Economy

President of Uzbekistan has signed a special decree that will aid to prepare the legal ground for the implementation of the blockchain, the regulation of mining and the circulation of digital currencies. The move is aimed at revolutionizing the state administration system and advancing the Digital economics in the Country.

President Shavkat Mirziyoyev signed the document, “On measures for the development of the digital economy in the Republic of Uzbekistan,” on Tuesday and it was published on Wednesday, July 4, 2018

Decree №ПП-3832, which entered into force with its publication, pronounces blockchainartificial intelligence (AI), supercomputers, and crypto-related activities as key development trends of digital economics worldwide. The document calls for the formation of conditions to introduce “digital economics” in the country.

According to the document, cryptocurrency transactions by authorized entities will not be governed by the provisions of the regular currency law. Also, monetary operations conducted by a business or individual people, including non- residents, related to the circulation of cryptocurrencies will not be subjected to taxation, and profits gained from such operations are not part of the taxable base.  

The decree also states that the National Project Management Agency (NAPM) and Ministry of ICT (MICT) are tasked to develop proposals on creating conditions for the development of the crypto industry and present draft amendments regarding the licensing regime within the next sixty days. Both institutions should also prepare and offer for discussions a draft law “On the digital economy and blockchain technologies” by January 1, 2019.

Prime Minister Abdulla Aripov has been designated to mastermind the implementation of the presidential decree.

According to the decree, Both MICT and NPM should design and implement a program on blockchain tech development from 2018-2020.

Beginning January 1, 2021, blockchain technology supposedly will be integrated into the operation of all governmental agencies to authenticate and pinpointing information, in systems of corporate management, and in clearing transactions.  The decree also states that all companies that wish to conduct crypto related activates including the operation of cryptocurrency exchange will have to acquire exclusive licenses. The document also mentions a limited tax regime on crypto assets:

“The turnover of crypto assets is regulated by special regulatory, legal acts. Operations related to this turnover are not subject to be taxed, while the revenues received are not included in the tax base.”

Uzbekistan is following fellow former Soviet republic- Belarus footsteps to boost the country’s development through innovation. On March 28, the presidential decree “On the Development of the Digital Economy” came into force. The move was aimed to create conditions for the development of the digital economy in Belarus. The decree effectively legalized cryptocurrency business operations, like crypto exchange services, initial coin offerings (ICOs)   mining operations, smart contracts. 

 

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