Uzbekistan is preparing for a crypto tax exemption with a new presidential decree. The draft document published recently also includes proposals for the establishment of a blockchain valley. Again, it is also describing the licensing regime for cryptocurrency miners. The country has just released its first licensed crypto exchange.

Crypto Tax Exemption Now in Uzbekistan

The Central Asian Republic of Uzbekistan legalized cryptocurrency trading and introduced licensing for crypto exchanges with a decree signed by President Shavkat Mirziyoyev in the fall of 2018. An earlier decree issued by the head of state in the summer of that year laid the legal grounds for other related activities to develop the country’s digital economy.

However, Uzbekistan is now fully ready to exempt income obtained in cryptocurrency operations from taxation. A draft-decree containing provisions to that effect has been published last week for public discussion. Moreover, Presidential Decree ID-12538 “On the measures for further development of the circulation of crypto assets in the Republic of Uzbekistan,” excludes crypto transactions from the scope of the nation’s foreign currency regulations. The draft document details:

Operations of legal entities and individuals related to the circulation of crypto assets, including those carried out by non-residents, are not objects of taxation. And income received from these operations isn’t included in the tax base for taxes and other obligatory payments.

Government’s Plans for 2020 with Crypto Tax Exemption

The National Agency for Project Management (NAPM) is a regulatory body responsible for the oversight of the digital economy including the crypto sector. Earlier this month, it reveals its plans for 2020. To illustrate, one of the key priorities of the agency working under the presidency is to establish a “national mining pool” for all private miners who will enjoy preferential electricity rates. Also, all industrial-scale mining operations will be subject to licensing starting from the 1st of February, according to the latest decree.

The government in Tashkent also intends to create a regulatory sandbox for testing crypto technologies called Uzbekistan Blockchain Valley. Authorities want to allow entities involved in the development of new financial products and services to implement them and conduct experiments without violating applicable laws.

The proposals for the establishment of the pool and the sandbox came from NAPM, the Ministry of Development of Information Technologies and Communications, the Central Bank of Uzbekistan, and the Ministry of Energy.

Launch of the Licensed Crypto Exchange

Uznex, Uzbekistan’s new digital asset trading platform, is operated by the Korean Company Kobea Group. Its launch was announced on Monday, 20th January 2020 during an opening ceremony in Tashkent. In the meanwhile, the Korean Cultural Center has hosted an international blockchain conference. The event gathered representatives of crypto companies from South Korea, Japan, and Singapore. Additionally, officials from Uzbekistan’s ministries and government agencies were also present there. This information first came from the country’s national information agency Uza. Kobea Group also opened its first office in the region.

According to another report, Uzbekistan citizens will be allowed only to sell cryptocurrencies in Uznex(dot)com. However, foreign entities and nationals residing in the country will have full access to its services. But they need to be within the framework of the country’s legislation. For the time being, Uznex is the only cryptocurrency exchange operating legally in Uzbekistan and possibly in the whole region.

The platform is now online and offers several trading pairs against bitcoin core and the stablecoin Tether. These include bitcoin cash and ethereum. According to the announcement quotes by the local media, Uznex should support several fiat options. It can include Uzbekistan’s national currency, the som (UZS), U.S. dollar (USD), and credit cards. However, the fiat payment and withdrawal methods aren’t currently available on the Uznex website, which is still in beta.

The exchange will also serve global users in the future who want to invest in digital financial assets, make international transfers or need access to credit. The Korean operator intends to play an active role in Uzbekistan’s socio-economic life. Its plans include the establishment of blockchain departments in the country’s leading universities.

Do you expect Uzbekistan will become the regional leader in the crypto space by introducing crypto tax exemption? Let us know what you think