In its efforts to promote its market-based economy, the government of Uzbekistan has decided to take a positive initiative in support of cryptocurrency trading and investments due to its bright future.

Uzbekistan aims to profit by exchanging Bitcoin

The former Soviet state, Uzbekistan, has confirmed that it is working on legalizing the cryptocurrency industry and will allow blockchain-based companies to set up their projects across the country. The ratification came on the heels of a presidential decree that was signed to encourage the use of cryptocurrency and blockchain technologies in Uzbekistan.

A document published by order of the President of the Republic of Uzbekistan, titled “Measures for Regulating Experimental Trading Activities in Uzbekistan,” revealed a set of official definitions of exchange protocols similar to those of Bitcoin. The country has confirmed that it will not deal with digital and cryptocurrencies as securities. Therefore, the rules common to stock exchanges will not interfere with newly created cryptocurrency trading platforms.

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Instead, the cryptocurrency trading business will fall under a new set of rules, referred to as private normative laws.

Only foreign legal entities that already have a subsidiary or other company in “Uzbekistan” will be able to open digital and cryptocurrency trading platforms. These entities will not be responsible for paying taxes on their pegged currency conversions. However, any revenue derived from cryptocurrency is not subject to taxation, bearing in mind that Uzbekistan will mark “crypto assets” as a set of data records on the blockchain — which they are — that have a specific value and a specific owner, according to the text.

Applicable terms and conditions

Free perks will not be completely free; Because the Uzbek government has also imposed special conditions to regulate cryptocurrency trading.

Or not: Foreign entities must have authorized capital to support up to 30,000 minimum wage on the day of filing. Furthermore, the equivalent of 20,000 minimum wages must be booked in a state-backed commercial bank. The minimum monthly salary in Uzbekistan was close to $185 in fiscal year 2017.

secondly: The country requires cryptocurrency exchanges to build their servers and hardware in Uzbekistan.

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Third: Uzbekistan will require platforms to adhere to the trading rules and publish trading rates based on the ratio of demand and supply.

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finally: The platforms must store information about transactions, user identification, and other data based on AML and KYC customer verification systems for a period of five years.

Cryptocurrency mining also gets a share of that.

The presidential decree also legalized mining in Uzbekistan and ordered state-controlled energy companies to allocate land for mining operations. Miners for bitcoin and other cryptocurrencies will use more power than electricity at locations designated by the National Project Management Agency, a body governed by the president’s own office.

Why does mining consume so much energy.. Learn more about it.