In recent years, Uzbekistan has emerged as a pioneer in embracing and regulating the crypto industry within its borders. With an aim to foster innovation while ensuring consumer protection and financial integrity, the country has implemented a robust regulatory framework governing various aspects of crypto activities. From licensing requirements for Crypto Asset Service Providers (CASPs) to classifications of crypto assets and marketing guidelines, Uzbekistan's regulatory landscape provides a detailed blueprint for operating within its crypto ecosystem, Sherzod Abdulkasimov writes in his article 'CRYPTO GUIDE UZBEKISTAN 2024.'
Legal Recognition and Regulation
Monetization and Taxation
All crypto transactions conducted by individuals or legal entities, including non-residents, are exempt from taxation in Uzbekistan. This exemption extends to the income generated from these operations, which is not considered part of the taxable base for taxation purposes. This tax-friendly environment incentivizes participation in the crypto market and promotes innovation within the sector.
Primary Regulator and Approach Towards Foreign CASPs
Types of Crypto Activities and CASPs
Uzbekistan's legal framework distinguishes between two primary types of crypto activities: mining and CASPs. Mining operations are allowed for legal entities utilizing electricity generated by solar photovoltaic stations, with registration required with NAPP. CASPs encompass four categories, each requiring licensing: crypto exchanges, crypto stores, crypto depositories, and mining pools. Detailed guidelines for CASP licensing are available on NAPP's website.
Key Players and Market Entry Standards
Several key players operate within Uzbekistan's crypto industry, including UzNEX, Coinpay, Lockton Hub, and Paynet Crypto. These entities offer a range of services, from crypto exchanges to crypto depositories, contributing to the development of the local ecosystem. NAPP aims to elevate market entry standards and prioritize reputable CASPs over smaller players, fostering a competitive yet stable environment for crypto businesses.
Classifications of Crypto Assets and Marketing Guidelines
Uzbekistan's legislation defines various classifications of crypto assets, including secured and unsecured tokens, each subject to specific regulations. Additionally, marketing guidelines mandate comprehensive warnings about the risks associated with crypto assets and prohibit misleading advertisements. CASPs must adhere to strict anti-money laundering protocols, ensuring customer identification and reporting suspicious transactions to authorities.
Earlier Daryo reported that NAPP has entered into a collaboration with Tether, a prominent player in the digital finance sector. This partnership, formalized via a Memorandum of Understanding, seeks to advance the growth of crypto-assets and blockchain infrastructure in Uzbekistan, with a focus on promoting innovation.
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