Uzbekistan legalises licencing for cryptocurrencies exchanges

A presidential decree has introduced licensing for cryptocurrency exchanges and set requirements they have to meet to operate in the country

What has happened?

A new presidential decree has legalised cryptocurrency trading in Uzbekistan.

What does this mean?

A decree signed by the president of Uzbekistan, Shavkat Mirziyoyev, earlier this week has introduced licensing for cryptocurrency exchanges and set the requirements they have to meet to operate in the country.

The move comes after the country issued another decree in July, preparing the legal grounds for regulating crypto activities.

The decree "On measures to organise the activities of crypto-exchanges in Uzbekistan”, states that cryptocurrency-related income will not be taxed, licensed exchanges running operations with cryptocurrencies and foreign fiat currencies are not subject to existing foreign currency regulations and crypto exchanges are not subject to the country's securities and exchanges regulations.

To operate in the country, foreign trading platforms will have to establish local subsidiaries and abide by the country’s relevant laws.

In order to get a licence, an exchange must meet a number of requirements.

They must have an authorised capital equal to at least 30,000 minimum wages on the day of the filing of the application and the equivalent of 20,000 minimum wages has to be reserved in a separate account with one of Uzbekistan’s commercial banks.

However, it is unclear whether the document means monthly or daily salaries.

Servers must also be located in Uzbekistan and exchanges must have anti-money laundering procedures in place.

Exchanges will need to store for five years information about all transactions, users’ identification data and other materials related to their interaction with customers, including business correspondence.

Crypto exchanges in Uzbekistan will be allowed to receive remuneration for their services and determine procedures for charging fees.

Their operators will be able to organise exchange transactions with residents and non-residents.

In respect of cryptocurrency mining, the state-controlled energy companies, “Uzbekenergo” and “Uzbekgidroenergo”, will be allocating land plots for industrial-scale mining operations using over 100 KW/h of electricity without holding auctions.

These locations will be designated in co-ordination with the National Project Management Agency under the President’s administration.

Next steps

If you want to take advantage of blockchain's huge potential and disruptive impact, while avoiding falling foul of ever-developing regulatory and legal requirements, visit our Hogan Lovells Engage Blockchain Toolkit.

Contacts
John Salmon
Partner
London
Languages English
Topics Blockchain

 

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