The Uzbekistan government has realized the power of cryptocurrencies and is now looking to use it to boost its economy.
Uzbekistan to lure more cryptocurrency exchanges
The government of the country has decided to implement favorable initiatives that will lead to the growth of the cryptocurrency industry in the country.
A presidential order was issued by President Shavkat Mirziyoev on September 2 which would make it easy for blockchain and cryptocurrency companies to set up their companies in the country.
The decree has legitimized cryptocurrency exchanges in the country according to a document published at the behest of the president of the Republic of Uzbekistan.
The document which is dubbed ‘on measures to organize the activities of crypto-exchanges in Uzbekistan’ list some official benefits and rules for cryptocurrencies. The document revealed that cryptocurrencies will not be treated as a security.
This implies that the regulations that cover security exchanges will not be applicable to cryptocurrency exchanges. The document added that cryptocurrency businesses will be treated under a new set of rules.
The document further revealed that cryptocurrency-related income will not be taxed. The crypto-related companies will not pay taxes on their cryptocurrency earnings since the country sees cryptoassets as a set of data records on blockchain.
In addition to that licensed exchanges running operations with cryptocurrencies and foreign fiat currencies are not subject to existing foreign currency regulations.
The government, however, noted that for a foreign entity to gain cryptocurrency exchange license, they will have to open a subsidiary in the country.
Certain conditions apply
Before a cryptocurrency company can enjoy the benefits, there are conditions that have to be met.
The foreign cryptocurrency exchange will need to have an authorized capital of no less than 30,000 times the average minimum salary which is around $700,000.
The exchange will also have an equivalent of 20,000 minimum wages stored in a state-backed commercial bank.
Exchanges are also required to have their servers located in the country. They are also required to make use of anti-money laundering procedures for users while also storing users’ transaction and personal data for a minimum of five years.
Miners not left out
The benefits also extend to cryptocurrency miners in the country. According to the document, miners using more than 100 kWh of power will be provided with land without requiring an auction in some territories.
These latest developments didn’t come as a surprise to many as the government had earlier revealed that they are working on developing new regulations for cryptocurrencies in the country.
Earlier this year, the government announced that it is planning on establishing a state-funded innovation center where blockchain opportunities will be explored.