By decree of the President of Uzbekistan Shavkat Mirziyoyev, the National Project Management Agency was transformed into the National Advanced Projects Agency (NAPP). It will be the main regulator in the field of cryptocurrency circulation.

The department will:

• development and implementation of state policy, ensuring compliance with the rights of investors in the field of cryptocurrency circulation;
• promotion of projects for the application of distributed recording technology in public administration;
• developing countermeasures against the legalization of proceeds from crime, the financing of terrorism, and the proliferation of weapons of mass destruction through cryptocurrencies.

The NAPP regulation includes definitions of crypto assets, mining, crypto exchanges, and a mining pool.

According to the document, a cryptoasset is a property right that represents a set of digital records in a distributed data record that has a value and owner.

From January 1, 2023, citizens and legal entities of Uzbekistan will be able to trade or exchange cryptocurrencies. exclusively through service providers.

These include exchanges, mining pools, crypto warehouses, and crypto stores. They must register a legal entity in Uzbekistan and obtain a license (or certificate for miners) from the agency.

The procedure for issuing licenses for service providers and certificates for miners to ForkLog at NAPP is currently under development, their approval is planned for the near future.

Transactions of natural and legal persons regarding the circulation of cryptocurrencies, not taxable.

The use of crypto assets as a means of payment or payment acceptance still continues in the territory of Uzbekistan. banned.

Mining can only be carried out by a legal entity registered with the NAAPP. In the case of connection to the unified energy system, a double coefficient is applied to the determined tariff for the electricity payment for the issuance of cryptocurrencies, and additional fees determined by the Council of Ministers are added during peak periods.

The regulation imposes a ban on the mining and transactions with “anonymous crypto assets”, as well as the practice of secret mining.

NAAPP also establishes a special regulatory sandbox regime where legal entities can implement pilot projects in the field of cryptocurrencies.

Sandbox participants are exempt from customs payments, as well as any taxes and mandatory contributions to government trust funds, excluding customs duties for imported equipment or components, software and documents.

The salaries of employees of such companies in this field will be subject to personal income tax of 7.5%.

Activities related to the use of cryptocurrencies as a means of payment are also prohibited within the framework of the Sandbox.

The implementation period of pilot projects under the special regime is not more than three years.

Recall that in November last year, Uzbekistan changed the provisions for trading cryptocurrencies on licensed exchanges, giving residents of the country the opportunity to trade digital currencies.