uzbekistan - Pwim.Net

Solar-powered Crypto Mining Becomes Legal in Uzbekistan

Companies in Uzbekistan can start mining cryptocurrencies using solar energy; a presidential decree released this week stated.

The decree has also exempted all crypto operations by domestic and foreign firms from income tax.

According to Reuters, the Tashkent government wants miners to generate power for their farms by installing their own solar panels.

The decree also stated that mining companies can connect to the main power grid for double the regular price. However, during peak consumption period extra surcharges can be levied.

It further added that companies do not require a mining license, but they must be registered by a newly formed Uzbek National Agency for Perspective Projects.

Crypto mining involves computers solving complex puzzles to “mine” or generate cryptocurrencies. These computers usually require large amounts of electricity.

Cryptocurrency trading in Uzbekistan became legal in 2018, but trades could only be conducted through a domestic crypto exchange.

Meanwhile, neighbouring Kazakhstan has cracked down on crypto mining after such operations strained its power grid dominated by ageing coal power plants.

Uzbekistan Blocks Binance Operating in the Country, Except UzNEX

Uzbekistan has blocked the websites of global cryptocurrency exchanges operating their services in the country, according to ForkLog media company reported the matter on Thursday.

According to ForkLog, the National Agency of Perspective Projects (NAPP), the industry regulator in the Republic of Uzbekistan, announced on Wednesday that it has restricted access to crypto exchanges and over-the-counter brokerage firms because the country’s regulations don’t allow citizens to trade cryptocurrencies on foreign platforms.

The agency told Forklog that foreign platforms that offer crypto services in Uzbekistan must obtain a service provider license to operate in the nation.

The NAPP said the only exchange that has received a license is the local exchange UzNEX.

The regulator accused foreign platforms of requesting personal data of the country’s residents without considering the requirement to install servers in the jurisdiction of Uzbekistan.

“We are always ready to consider applications for a license from all major crypto exchanges if they are interested in starting their activities on the territory of Uzbekistan in accordance with the requirements of the law,” NAPP stated.

Gleb Kostarev, Binance’s head of Eastern Europe, confirmed that since Tuesday, the exchange’s website hasn’t been accessible for its users in Uzbekistan. The executive also mentioned that exchanges such as Huobi, FTX, Bybit, and others are also blocked.

Kostarev said Binance is engaging in discussions with Uzbekistan authorities about the exchange status in the country.

Establishing KYC Requirements

The NAPP recalled that in April this year, the Uzbekistan government issued a decree that said, from January 1, 2023, Uzbekistan citizens and legal entities are expected to conduct purchase transactions and sale of cryptocurrencies exclusively through local service providers.

The regulator said: “From the moment [the decree was published], we did not block foreign platforms, as we understand that our citizens have funds on these platforms. But this measure did not mean that citizens could safely trade on foreign platforms until January 1, 2023. There has already been a ban on this since 2019.”

In May, Uzbekistan President Shavkat Mirziyoyev established a regulatory framework for the nation’s crypto industry and gave the NAPP more authority in overseeing the industry.

On April 27, President Mirziyoyev issued a directive that crypto exchanges, mining pools, and crypto custodians operating in their services in the Central Asian country must be registered locally.

As of January 1 2023, the directive expects Uzbekistan residents to be able to purchase or sell cryptocurrencies only on the local exchanges, which must verify the identity of users through a Know-Your-Customer (KYC) process and store data about all transactions for five years.

The directive assigned new responsibilities to the NAPP and ordered the agency to be restructured. The agency is now responsible for developing new policies for crypto and ensuring that such digital assets are not used for money laundering and terrorism financing.

Uzbekistan Announces Monthly Fees for Crypto Firms

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The National Agency for Perspective Projects (NAPP), an agency that regulates cryptocurrency markets in Uzbekistan, has announced new directives that require licensed crypto companies to pay a monthly fee that will mostly go toward the country’s budget.

An official document published on Wednesday but seen on Friday shows that the new rule is registered with the Department of Justice and is effective immediately.

The law set out by the NAPP, the Finance Ministry, and the State Tax Committee of the Republic of Uzbekistan is already in force.

The tariffs to be paid vary based on the type of services these companies provide. For instance, cryptocurrency exchanges are expected to pay 120 million soums ($11,000) per month. The document also highlighted proportionally smaller payments required from custodial services, mining pools, cryptocurrency stores, as well as individual miners.

According to the new rules, 20% of the monthly fees paid by crypto users and firms will go to the treasury of the NAPP while the rest (80%) will go to the country’s budget.

Firms that fail to pay the new fee will face penalties including the suspension of their licenses. “Failure to pay the fee within one month is grounds for suspension of the license. If the company fails to pay the monthly fee twice within a year, the license may be cancelled,” the document stated.

Enhancing Oversight in The Market

Last month, Uzbekistan’s crypto regulator blocked access to international exchanges, as part of the government’s efforts to keep alternative payment systems under strict control. Blockchain.News reported the matter.

On August 12, the NAPP blocked foreign exchanges because they were operating in the country without the licenses they are legally required to obtain.

During that incident, Binance exchange confirmed its services were blocked and said it was in negotiations with the government about its status in Uzbekistan.

Efforts to regulate the trade in digital currencies started in 2018 when Uzbekistan legalized crypto trading. In April, President Shavkat Mirziyoyev issued a decree that reinforced rules governing the industry, boosting regulation of cryptocurrency trading and mining in the country.

Under the regulations, crypto exchanges are required to get a license in Uzbekistan. The NAPP expects as of January 1, 2023, Uzbek citizens and companies to only conduct transactions with licensed crypto exchanges.

According to the regulator, licensed providers are required to verify users’ identities and store data about every transaction for five years. Forcing these entities to get licenses allows the government to track and tax them.

Two Uzbek "crypto stores" get their first crypto licenses.

Uzbek officials have begun awarding regulatory permissions to local crypto service providers as the country prepares to implement a new cryptocurrency framework in 2023. This adoption is expected to take place in 2023.

According to an official declaration that was made public on November 17, the National Agency for Perspective Projects (NAPP), which serves as the primary cryptocurrency market regulator in Uzbekistan, has completed the distribution of the first crypto licenses in the country.

Both Crypto Trade NET LLC and Crypto Market LLC, both of which are referred to as “cryptocurrency stores,” have received licenses that formally permit them to provide services connected to cryptocurrencies.

Tashkent is listed as the location of operations for both Crypto Trade NET and Crypto Market in the data obtained from the electronic license registration maintained by the NAPP.

Behzod Achilov is not only the owner of Crypto Trade NET, but he is also the company’s only creator.

At the time this article was written, none of the platforms seemed to have a website that was actively being updated.

According to the statement made by the NAPP, the two firms have been granted licenses in accordance with the presidential decree that was published in April 2022. This decree provides standards for the circulation of crypto assets inside Uzbekistan.

The announcement comes not long after the government of Uzbekistan restricted access to a number of the world’s largest cryptocurrency exchanges on the grounds that they had the appropriate licenses to provide cryptocurrency trading services.

After making the announcement of the measures in August 2022, the NAPP seems to have removed that statement since then.

The most recent licenses are issued at a time when Uzbekistan is making strenuous efforts to develop a new crypto regulatory framework within the next few months.

Only cryptocurrency companies that have been granted licenses by the government of Uzbekistan will be permitted to provide their services to inhabitants of that country beginning on January 1, 2023.

Tether Advances Global Blockchain Ambitions with Uzbekistan Partnership

Tether Operations Limited has entered into a Memorandum of Understanding (MOU) with the Republic of Uzbekistan. The goal of this groundbreaking partnership is to develop advanced blockchain and peer-to-peer telecommunication infrastructures within the country. This joint endeavor is not only a testament to Tether’s international strategy of fostering resilient digital ecosystems but also positions Uzbekistan as a prospective global hub for blockchain and crypto innovations.

A Synergistic Alliance for Economic Growth

By aligning with the National Agency of Perspective Projects (NAPP), Tether intends to propel Uzbekistan to the forefront of the blockchain revolution. This collaboration is multifaceted, encompassing the enhancement of legal frameworks for crypto assets, support for the national digital currency’s development, exploration of asset tokenization, and the optimization of payment infrastructures. The partnership also emphasizes educational initiatives to bolster blockchain literacy among Uzbekistan’s students and professionals.

Cementing a Resilient Digital Infrastructure

The MOU underscores the critical nature of robust digital infrastructures, with Tether and NAPP committed to realizing a secure, swift, and cost-effective financial system. This initiative is poised to revolutionize Uzbekistan’s digital currency payment landscape, making it more resilient and independent.

Local and Global Impacts

The Director of NAPP, Lee Dmitriy Romanovich, highlighted the immense potential this collaboration holds for Uzbekistan’s economic development. By integrating blockchain technology into public services and beyond, the partnership aims to substantially improve the quality of life for Uzbek citizens. Furthermore, this alliance serves to elevate Uzbekistan’s status as an attractive destination for blockchain businesses and professionals globally.

Fostering a Knowledgeable Crypto Community

At its core, this partnership is dedicated to nurturing a profound understanding of blockchain and related technologies. With the support of local academic institutions, Tether and Uzbekistan are set to create educational programs targeting blockchain technology, stablecoins, and peer-to-peer telecommunications. These programs are designed to equip individuals with the skills needed to excel in the burgeoning crypto industry.

Conclusion

Tether’s collaboration with the Republic of Uzbekistan marks a pivotal step in the expansion of global blockchain capabilities. It promises to invigorate economic growth and innovation, providing a blueprint for how governments and private entities can work together to harness the power of emerging technologies. As this partnership unfolds, the eyes of the blockchain world will undoubtedly be on Uzbekistan, watching as it takes strides towards becoming a leading force in the digital age.