The govt. of Uzbekistan has recently confirmed thatit’slegalizing digital currency exchangesand wouldenablethe setup of blockchain basedfirmsto lineup their officeswithin the state. This action camewithin thewake of a presidential decree that was signed to encouragethe employmentof cryptocurrencies and blockchain inthe state.
A document published at thecommandof the president of the Republic of Uzbekistan, titled “On measuresto organisethe activities of crypto-exchanges,”discloseda groupof official definitions for bitcoin-like digital currencies. The state has confirmed thatit’llnot treat digital currencies like securities. Therefore, the common laws thatare bound to security exchangeswon’thasslecrypto exchanges. Instead, the crypto businesseswould be considered underneath a new set of rules,called as special normative acts.
Only foreign legal entitiesthathave already gota subsidiary orotherenterprises inthe statewould be permitted toopen crypto exchanges. These entitieswon’tbesusceptible topay taxes on their cryptocurrency turnovers. That said, any revenue derived from the cryptocurrencieswould be considereduntaxable, consideringthat the state would be defining crypto based assets asa setof datarecords based on the blockchain technologythathave aworthand a owner,accordingto the statement.
The free perks won’t beexactlyfreeasthe govt. hasadditionallyimposed special conditions that would be required to setup crypto exchanges in the state.
Firstly, the foreign entitiesshouldhavea licensedcapital to supportatleast as muchas30,000 minimum wages on the day they apply. Moreover,an averageof20,000 minimum wageswould beneeded tobe reservedin astate-backeddepository financial institution ‘bank’. Secondly, the stateneedsthe crypto-exchanges to base their servers locally only.
Thirdly, the state will require the exchangesto stickto rules forcommerceandpublishingexchanges ratessupportinga demand-and-supplyratio.
Finally, the exchangesshouldstore all the informationon transactions, users identification, and KYC/AML – basedinformationfor a min. of 5years.
The presidential decreeadditionallylegalizes cryptocurrency mining inthe stateand has ordered energyfirmsto allocate apportion oflands for the mining operations.