The Republic of Uzbekistan continues to progress with local cryptocurrency regulations, with Uzbek President Shavkat Mirziyoyev issuing a new decree regulating the industry. The Republic of Uzbekistan is preparing to adopt a new crypto regulatory framework including a 7.5% income tax on crypto-related salaries. The decree also provides comprehensive legal details related to for cryptocurrency mining operations in Uzbekistan.
Uzbekistan will allow companies to mine cryptocurrencies using solar energy and will exempt all crypto operations by domestic and foreign companies from income tax, according to a presidential decree.
In 2018, Mirziyoyev ordered the establishment of a state blockchain development fund aiming to integrate blockchain into public administration projects like healthcare and education.
Uzbekistan legalized cryptocurrency trading in 2018 but only on a domestic crypto exchange. The central Asian nation has also launched a series of renewable energy projects, mostly solar and wind power plants. The new decree instructs a reorganization of a major presidential agency known as the National Agency for Project Management (NAPM). The authority has previously promoted crypto trading in Uzbekistan, proposing to allow residents to conduct all types of crypto trades in 2021.
According to the decree, the NAPM will be restructured into a new entity called the National Agency for Perspective Projects (NAPP), responsible for a wide range of crypto regulation-related projects with the mission to adopt a “special crypto regulation regime” in Uzbekistan.
The agency is required to develop and adopt a unified state policy on crypto as well as ensure investor protection and enforce measures to combat illegal activities like terrorism financing. The NAPP will also initiate and promote projects that apply blockchain and other emerging technologies in public administration and other socio-economic sectors.
The NAPP can establish legal conditions for entities using crypto and blockchain tech as well as virtual asset providers including crypto trading and mining firms, industry stores and others. The agency is also responsible for licensing and supervising virtual asset service providers, which are required to pay a number of state fees.
Participants in a new regulatory sandbox established by the NAPP to pilot crypto projects will also be eligible for tax benefits. However, the active members will also exclude the entities engaging in the trials from other state budget responsibilities, such as customs payments other than levies on imported hardware and software.