Uzbekistan to Legalize Cryptocurrencies: Tax-Free Operations, Invest in Blockchain Technology
The landlocked Central Asian nation of Uzbekistan issued an official resolution on July 3, 2017, pertaining to the development of cryptocurrencies, mining, and blockchain technology. Significant takeaways include legalizing digital assets and launching a state-backed mining endeavor.
Uzbekistan’s Cryptocurrency Push
Titled “On Measures for the Development of the Digital Economy in the Republic of Uzbekistan,” President Shavkat Mirziyoyev signed a resolution featuring the burgeoning cryptocurrency sector, artificial intelligence (AI), and supercomputers.
The document specifically identified blockchain technology and “crypto-assets” as the future of a digital economy in several countries. Local news Spot quoted the President:
“Blockchain technologies are gradually being introduced not only to many sectors of the economy, but also to the system of state administration and other public relations.”
Speaking of improved public administration, the document called for creating an optimal environment for developing a digital ecosystem and noted the following points as most important:
- Implementation and development of activities in the area of the turnover of crypto-assets, including mining, smart contracts, and blockchain for increasing entrepreneurship and investment in the field.
- Training citizens in the development and use of modern Information, Communication, and Technology.
- Cooperation and comprehensive development with international organizations and experts in the field of crypto-assets and blockchain.
- Establishment of the necessary legal framework for the implementation of the blockade, taking into account the best practices of foreign countries.
- Ensuring close cooperation between the state and private business in the field of technology deployment for the further development of the digital economy.
The document confirmed Uzbekistan’s National Project Management Agency (NAPU) is entrusted with implementation and development of the resolution.
Taxes and Licenses
The resolution mentioned the creation of “special regulatory legal acts” for taxing cryptocurrencies. In contrast to other major countries, Uzbekistan will not levy taxes on “cryptocurrency operations” and business revenues. However, the extent of this statement remains unclear.
The country will also issue licenses to interested parties. Further, the norms of the aforementioned law will not apply to licensed corporations and individuals.
The NAPU and Ministry of Finance are instructed by the resolution to provide, create, and implement relevant regulations and licensing procedures before 2020 and ensure the development of activities of cryptocurrency businesses, legal frameworks for trading and purchasing, and licenses for attracting local and international cryptocurrency exchanges.
Also, NAPU gets a share in the statutory fund of the MUIC Directorate, and within three months “Uzbekenergo” and “Uzbekhydroenergo” will propose to launch a pilot project on mining.