Uzbekistan is the next country to start moving towards a more promising crypto future, by legalizing crypto exchanges and permitting blockchain companies to set up offices in the country.
A document has been issued in the name of the president “On measures to organize the activities of crypto-exchanges in Uzbekistan,” in which a set of crypto-related terms were defined, such as crypto exchange and crypto assets. From the document, it is evident that digital currencies will not be seen as securities, hence the requirements for security exchanges will not be applicable for crypto exchanges, which will function under a set of special normative acts.
Foreign legal entities that have a subsidiary or other operations in Uzbekistan will be the only ones authorized to open crypto exchanges. The crypto turnover will not be taxed, just as any crypto profit in Uzbekistan, since they quite rightly define crypto as an array of data records on a blockchain which has a value and a holder.
This might sound like a good deal, but the fine print should also be read.
In order to set up an exchange, the company will first be required to support as much as 30,000 minimum wages when applying and a sum corresponding to 20,000 minimum wages will be needed to be reserved a state-backed commercial bank. In the 2017 financial year, the minimum salary was roughly $185. Secondly, the servers will be obligated to be stationed in Uzbekistan. Thirdly, the exchanges will need to follow rules for publishing and trading exchange rates based on a demand-and-supply ratio. Last but not least, information on transactions, users identification, and other KYC/AML-based data must be stored for five years.
Cryptocurrency mining is also to be legalized in Uzbekistan as according to the presidential decree, and state-controlled energy companies are to set assign land for mining operations.
WHY IS THIS IMPORTANT?
- Another country is getting on board the crypto bandwagon, which could mean we are a step closer towards the mainstream adaptation of crypto.
- And this could be good news for the companies that could reap the benefits that Uzbekistan offers for opening an exchange there.