The funds circulating within the cryptocurrency market are valued at billions of dollars. Every country operates under distinct legal frameworks, often rendering cryptocurrency investments less appealing. Uzbekistan, too, followed this trend initially. Nonetheless, the nation has shifted its stance over time. In a move to foster the growth of cryptocurrency ventures, Uzbekistan has recently enacted multiple legislations, incorporating the Uzbekistan crypto license to bolster this sector.
The Introduction of the Uzbekistan Crypto License Framework
To streamline and govern the fast-evolving digital economy, Uzbekistan’s President enacted Presidential Decree No. 3832 on July 3, 2018, aimed at advancing the digital economy within the nation. This decree, crucial for introducing the crypto license Uzbekistan, focuses on key areas:
- Advancing crypto-asset activities, including mining, smart contracts, consulting, and more, for investment and business diversification.
- Establishing a legal basis for blockchain technology adoption inspired by international best practices.
The decree also provides significant incentives for crypto transactions:
- Tax exemptions for crypto transactions, including for non-residents.
- Currency transaction freedom for licensed crypto asset handlers.
Subsequent to Decree No.3832, Decree No.3926 was signed to regulate crypto-exchange activities, specifying:
- Definition and operation framework for crypto exchanges and assets.
- Exemption from securities and exchange legislation for crypto-related activities.
- Licensing for foreign entities to run crypto exchanges via local subsidiaries.
- Allocation of land for industrial mining exceeding 100 kW/h without auction.
Regulatory Framework for Cryptocurrency in Uzbekistan
Working under the direct supervision of the President, the National Agency for Prospective Projects (NAPP) is the central body that controls the cryptocurrency sector in Uzbekistan. This agency allows you to obtain cryptolicense in Uzbekistan and has the authority to adopt new rules related to this niche. In addition, this body is responsible for regulating capital markets and the insurance sector in the country.
Definition and classification of cryptocurrencies
A “crypto asset” is defined as a digital set of records in a distributed ledger that has value and ownership in the Uzbek legal system. Managed through smart contracts, a “token” is a special type of crypto asset that acts as a digital representation of rights to assets or liabilities and has a classification:
Secured Tokens, which are backed by assets, including:
- Investment Tokens — certify ownership or debt relations, offering rights to earnings or interest.
- Asset-Backed Tokens — represent rights to physical assets.
- Commodity Tokens — digital symbols for commodities, aiding in tracking or exchanges.
- Stable Tokens — pegged to the value of currencies, ensuring stable value.
- Unsecured Tokens, lacking any asset backing.
Regulations specific to Uzbekistan stipulate restrictions on issuing Stable and Unsecured Tokens by residents, and crypto repositories are barred from registering these token issuances.
However, the issuance of certain Utility Tokens (Unsecured Tokens for specific ecosystem functions) is permitted, including:
- Access Tokens — for software access, exchangeable for currency or other assets.
- Ticket Tokens — for entry to events.
- Voucher Tokens — offering discounts on digital goods/services.
- Governance Tokens — allowing voting rights within the issuer’s ecosystem.
Utility tokens cannot be utilized outside the issuer’s ecosystem, and crypto exchanges are restricted from dealing with Stable and Unsecured Tokens in certain contexts.
Regulatory Documents
- Resolution No. RP-3832 (July 3, 2018): Digital Economy and Crypto-Asset Regulation.
- Resolution No. RP-3150 (July 27, 2017): Establishment of NAPP.
- Resolution No. RP-3926 (September 2, 2018): Crypto Exchangeе Organization.
- Resolution No. 3309 (June 9, 2021): Anti-Money Laundering and Anti-Terrorism Financing in Crypto.
- Order No. 3380 (August 15, 2022): Licensing for Crypto-Asset Services.
- Order No. 3379 (August 15, 2022): Crypto Asset Trading Rules.
- Resolution No. 3388 (September 28, 2022): Crypto-Asset Activity Fees.
- Order No. 3395 (October 31, 2022): Crypto Store Operations.
- Order No. 3397 (November 28, 2022): Cryptocurrency Issuance and Circulation.
- Order No. 3409 (December 30, 2022): Special Regulatory Sandbox Registration for Cryptocurrency.
Possible Crypto Activities in Uzbekistan
Cryptocurrency Mining
- Permitted for entities using solar-generated electricity, with stringent tariffs and surcharges for conventional power use.
- Mandatory registration with the National Agency of Perspective Projects (NAPP) is required, pending the finalization of detailed registration protocols expected by late 2023.
- The mining of anonymous cryptocurrencies and covert mining practices are strictly forbidden.
Virtual Asset Service Providers (VASPs)
A breakdown of VASPs includes four licensable categories, each with its own fee structure:
Crypto-Exchange
- Facilitates crypto trading on digital platforms.
- Licensing fees are set around $1,985,000, plus a monthly $10,800 regulatory fee.
Crypto-Shop
- Offers platforms for buying and selling crypto.
- Uzbekistan cryptocurrency license fees are nearly $70,300, and monthly operational fees of approximately $540.
Crypto-Depository
- Provides issuance, offering, and storage services for crypto assets.
- The licensing expense is about $497,500, alongside a $135 monthly fee.
Mining Pool
- Consolidates computational resources for mining.
- Requiring a license fee of roughly $51,400 and a $2,700 monthly operational cost.
- Further regulations are expected by the end of 2023.
Cryptocurrency License in Uzbekistan and Spain
If you want to obtain crypto exchange license in Uzbekistan, you should immediately be prepared to have a significant financial base, as well as launch a crypto exchange system on Uzbek servers. In addition, the system must strictly comply with detailed rules on trading and anti-money laundering, market-based pricing, and retaining transaction records for five years.
Considering Spain for obtaining a cryptocurrency license, registration with the Central Bank for establishing a legal entity is required. It is also important to provide a physical office and develop a comprehensive business plan. Spanish law pays special attention to regulatory compliance, operational infrastructure, and compliance with anti-money laundering guidelines.
Procedure for Obtaining a Crypto License in Uzbekistan
Securing a crypto exchange license Uzbekistan necessitates meeting several critical criteria underlined by both financial and operational benchmarks.
Capital Requirements
An initial fund of at least 30,000 essential calculated amounts (equivalent to around USD 761,000), with a mandatory reservation of 12,000 units (about USD 305,000) in a dedicated account at a local Uzbek bank.
Operational Infrastructure
Establishment of a fully operational crypto-exchange system situated within Uzbekistan’s borders on local servers, adhering to the national guidelines for crypto-exchange licensure.
Regulatory Compliance and Trading Rules
- Establishing a straightforward process for the admission of bidders.
- Implementation of measures to harmonize with anti-money laundering, anti-terrorist financing, and anti-proliferation laws.
- Determining the criteria for the circulation of cryptoassets, as well as their introduction and withdrawal from circulation.
- Establishing protocols for recording and executing transactions.
- Determining the procedure for settlements between bidders.
- Determination of exchange fees and methods of their calculation.
- Establishing safeguards against market manipulation and misuse of confidential information.
- Ensuring a ban on the illegal use of crypto assets.
Market pricing
The need for asset quotes to reflect the real dynamics of market supply and demand.
Data storage
A five-year mandatory retention period for all records of transactions, customer identification, and related communications.
FAQ
What is the status of cryptocurrency regulation in Uzbekistan?
Uzbekistan regulates its cryptocurrency industry through a detailed legal and regulatory framework. This covers mining, VASPs, anti-money laundering in cryptocurrencies, as well as the issuance and circulation of cryptocurrencies. It also provides a regulatory sandbox for testing blockchain innovations.
What is the main regulator of the cryptocurrency market in Uzbekistan?
Reporting to the President, the National Agency for Prospective Projects (NAPP) is the main body that regulates and licenses the cryptocurrency market. It is also responsible for overseeing the capital market and insurance sector.
Is it possible to issue all types of tokens in Uzbekistan?
The issuance of stable and unsecured tokens by residents is limited to Uzbekistan. Under certain conditions, the issuance of specific utility tokens such as Access, Ticket, Voucher, and Governance Token is allowed.
What is required to operate a VASP in Uzbekistan?
There are different categories for crypto exchanges, shops, depositories, and mining pools, which means that to operate as a VASP, you need a NAPP cryptocurrency license Uzbekistan in one way or another. Each of these has monthly operating fees. In addition, strict KYC and anti-money laundering rules are required following FATF recommendations.
