March 25, 2022
Crypto-assets in the Republic of Uzbekistan
Regulation:
- Resolution of the President of the Republic of Uzbekistan dated July 3, 2018 No. 3832 “On measures to develop the digital economy in the Republic of Uzbekistan” (hereinafter – “PP-3832“);
- Resolution of the President of the Republic of Uzbekistan dated September 2, 2018 No. 3926 “On measures to organize the activities of crypto-exchanges in the Republic of Uzbekistan” (hereinafter – “PP-3926“).
Forming legal framework for digital economy
In the era of development of information technologies, digitalization of society, the question of regulating new objects and related relations arises. With the introduction of such objects as crypto-assets and tokens in civil circulation new relations between subjects began to emerge, which without regulation are creating or can create unexpected consequences in the future.
The Resolution of the President of the Republic of Uzbekistan dated July 03, 2018 No. 3832 “On measures to develop the digital economy in the Republic of Uzbekistan” was adopted to create a framework and regulate this rapidly-developing area. The Resolution outlined the most important tasks:
- implementation and development of activities in the field of crypto-assets’ turnover, including mining (activities to maintain the distribution platform and create new blocks with the ability to receive remuneration in the form of new units and commission fees in various cryptocurrencies), smart contracts (an agreement in electronic form, the exercise of rights and responsibilities for which is carried out by automatic execution of digital transactions), consulting, emission, exchange, storage, distribution, management, insurance, crowdfunding (collective financing), as well as blockchain technologies for diversifying various forms of investment and entrepreneurial activity;
- development of the necessary legal framework for the implementation of blockchain technologies, taking into account the best practices of foreign countries;
PP-3832 also set a couple of essential rules. Firstly, transactions of legal entities and individuals related to the turnover of crypto-assets, including those carried out by non-residents, are not subject to taxation, and income received from these transactions is not included in the tax base for taxes and other mandatory payments. Secondly, currency transactions related to the turnover of crypto-assets carried out by persons who have received a license to carry out activities in the field of turnover of crypto-assets in the prescribed manner are not subject to the norms of the legislation on currency regulation.
Blockchain implementation in Uzbekistan
It is planned to introduce blockchain technology from January 1, 2021
- in the activities of state bodies, including when interacting with other state bodies and other organizations, the implementation of public procurement, the provision of public services, verification of personal information;
- when maintaining state registers, classifiers and other databases, including updating and using the information included in them;
- into the corporate governance system of large commercial organizations with a predominant state participation in the charter capital, including for improving business processes, optimizing production, administrative and operational processes, as well as introducing modern management and resource management;
- in clearing operations, when making payments, trade finance (letter of credit), as well as project lending.
Adoption of PP-3926 created a legal foundation for the operation of crypto-exchanges on the territory of Uzbekistan. According to PP-3926, a crypto exchange is an organization that provides an electronic platform for the exchange, purchase and sale of crypto-assets. PP-3926 established licensing requirements and conditions for the operation of crypto-exchanges.