Uzbekistan has secured the 33rd position globally and leads the Central Asia and Caucasus region in the 2024 Global Crypto Adoption Index. The ranking was revealed in a comprehensive study conducted by RISE Research in collaboration with Freedom Horizons, with contributions from KPMG Caucasus and Central Asia, the Astana International Financial Center, the National Payment Corporation of Kazakhstan, and Mastercard.
Global Crypto Adoption Index Overview
The Global Crypto Adoption Index is a metric designed to assess cryptocurrency adoption levels across countries. It evaluates how extensively individuals and businesses utilize cryptocurrencies for transactions, investments, and financial operations. The index analyzes various factors to compare countries' involvement in the crypto economy.
Uzbekistan's Rising Position
Uzbekistan’s advancement in decentralized finance (DeFi) adoption is attributed to its young, technologically proficient population. In 2023, 512,300 citizens owned crypto assets, accounting for 1.46% of the country's population. This growing adoption is supported by an expanding crypto infrastructure and government regulatory frameworks.
Licensed Crypto Providers
As of October 2024, Uzbekistan hosts 15 licensed service providers in the crypto industry:
- 2 Crypto Exchanges
- 3 Crypto Depositories
- 10 Crypto Stores
The industry has seen significant economic activity, with a turnover exceeding $1bn and state budget contributions surpassing $3.6 mn since 2022. Residents can access crypto assets exclusively through licensed providers, and transactions are exempt from taxation, providing an incentive for participation. Additionally, these providers operate outside currency control regulations.
Regulatory Framework and Sandbox
The National Agency for Prospective Projects (NAPP), Uzbekistan’s crypto market regulator, has established a regulatory sandbox to test blockchain technologies. This initiative offers participants tax benefits and other incentives to foster innovation. Currently, three organizations are working on four projects under the special regime.
- Uzinfocom: Developing NFT certificates for the ".uz" domain and a distributed data registry named Token.uz.
- Octobank: Creating a card product and virtual bank card, Crypto Card-UzNEX, in partnership with Mastercard.
- Heemera: Utilizing AI and machine learning for crypto asset tracking, recovery, and compliance across a network of partners in 142 countries.
Stablecoin Initiatives
In March 2024, Uzbekistan signed a memorandum of understanding with a leading Tether issuer. Tether USD (USDT), pegged to the US dollar, is the third-largest crypto asset globally after Bitcoin and Ethereum. This collaboration reflects Uzbekistan’s openness to stablecoin development as part of its broader crypto ecosystem.
Mastercard's Role in Uzbekistan
Denis Filippov, General Director of Mastercard in Uzbekistan, emphasized the role of regulators in fostering a favorable environment for crypto assets. He highlighted that blockchain technologies and crypto assets could enhance financial service flexibility and accessibility, contributing to economic growth. Mastercard has partnered with Octobank to launch innovative financial products that leverage cryptocurrency and blockchain solutions.
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