In 1Q24, the National Agency for Prospective Projects (NAPP) issued a license to a new market participant, bringing the total to 15 licenses, including 2 for crypto exchanges, 3 for crypto depositories, and 10 for crypto stores. This sector generated over UZS 44 bn ($3.5 mn) for the state budget from 2022-2024 and created more than 72 jobs, the NAPP announced during the press conference on May 24.
The officials highlighted changes in legislation, institutional development, and international cooperation in the crypto-asset sector. Updates were also provided on the insurance market, consumer rights protection, and the regulation of insurance organizations.
A new rule was enacted to regulate mining pool activities, ensuring regulation for crypto-asset turnover in Uzbekistan on March 20. Additionally, measures introduced in January 2024 imposed administrative and criminal penalties for illegal crypto-asset activities, effective from April 20.
In March 2024, a Memorandum of Understanding (MoU) was signed between the Agency and Tether, focusing on developing blockchain technology, stable tokens, and asset tokenization. This cooperation aims to enhance the legislative framework, implement asset tokenization technologies, and promote educational initiatives to improve blockchain and crypto-asset literacy in Uzbekistan.
Two organizations currently operate within the Special Regulatory Sandbox Regime:
1. United Integrator “UZINFOCOM”:
Project 1: Issuing certificates for names in the national domain zone ‘.UZ’ as NFTs.
Project 2: Developing a distributed data registry, 'Token.uz'.2. Octobank:
Developing and implementing a virtual bank card 'Crypto Card-UzNex' in collaboration with MasterCard.
Uzbekistan insurance market
As of May 24, Uzbekistan's insurance market consists of 30 insurance companies, including 25 general insurance companies and 5 life insurance companies.
The total volume of collected insurance premiums reached UZS 2.2 trillion ($173.2 mn), with the insurance premium per capita amounting to UZS 59,900 ($4.7). The share of collected insurance premiums in GDP was 0.9%. The total authorized capital of insurers was UZS 2.3 trillion ($181 mn), and their investments in the economy totalled UZS 6.1 trillion ($480.2 mn). The total assets of insurers amounted to UZS 9.9 trillion ($181 mn), with the number of active contracts totalling 8.7 mn units and insurance payments amounting to UZS 566.6 bn ($44.6 mn).
Efforts to protect the rights of consumers of insurance services include handling 1,592 appeals received by the authorized state body. Out of these, 804 appeals (51%) resulted in insurance indemnities being paid, totalling UZS 11.9 bn ($936,748). Legal explanations were provided for 775 appeals, while 13 appeals are still under consideration.
In regulatory activities, a fine of UZS 224 mn ($17,633) was imposed on two companies for non-compliance with established norms, and their licenses were suspended for 10 days. Additionally, the licenses of two insurers were revoked based on their applications. A new license was issued to an insurance broker, and the licenses for three insurance companies and one insurance broker were re-issued. An insurer's license was amended to include additional classes and three actuarial qualification certificates were issued.
To enhance the insurance market and improve regulation, measures were implemented to support the market's development. From September 1, all insurance and reinsurance contracts, as well as insurance policy registrations, will be conducted through the Unified Information System. The processes of providing insurance services, including contract conclusions and claim submissions, will be simplified through the integration of databases from various ministries and departments.
Developments in Uzbekistan's capital market
The Agency is enhancing the management of Uzbekistan's securities market to attract foreign investment. Key initiatives include:
- Regulatory Sandbox: Simplifies recognition for foreign investment intermediaries from 38 recognized jurisdictions.
- Digital Identification: Streamlines client-broker information exchange, reducing paperwork.
- Issuer and Securities: 673 issuers with 197 trillion soums in circulation. 1.1 trillion soums in bonds registered in 2024.
- Licensing and Investor Protection: Issued 3 new licenses, re-issued 5, and issued 417 qualification certificates. Recovered 200 mn soums from investor rights appeals.
- Modernization Efforts: Upgraded Openinfo.uz for automatic data transfer and launched a Telegram bot for quick access to issuer information.
Plans include further improving the RFB 'Tashkent' and simplifying investor participation. Meetings with international organizations have led to draft laws on the capital market and green bond rules, signalling Uzbekistan's commitment to a transparent and investor-friendly market.
Developments in electronic commerce in Uzbekistan
Following a presidential decree, the NAPP now oversees e-commerce regulation and development. The Agency initiated a series of meetings with key market players and foreign investors in 1Q24. Participants included major platforms such as WeChat, AliPay, Wildberries, Ozon, Yandex, Uzum, and Zoodmall. These meetings aimed to gather feedback on existing challenges and barriers hindering the sector's growth.
Building on the feedback received, the Agency conducted comprehensive studies and research on the e-commerce market. This included an inventory of legislation governing e-commerce and the development of proposals to address identified barriers. These efforts are aimed at fostering a more conducive environment for e-commerce development.
It conducted studies on e-commerce legislation and proposed solutions. As Internet technologies and digital advancements continue to evolve, the legislative framework governing e-commerce will be further refined. This includes the introduction of new concepts, terms, and tools to regulate relationships within the e-commerce ecosystem. Additionally, new norms will be introduced to ensure the protection of consumers' rights and interests.
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