Uzbekistan: 2 firms secure landmark digital asset licenses ahead of sweeping industry changes

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Uzbekistan is looking to introduce a comprehensive regulatory framework for digital assets beginning in 2023, but regulators have already taken the initiative in issuing licenses to operators.

The National Agency for Perspective Projects (NAPP), the country’s chief digital assets regulator, has granted permits to two firms to operate “cryptocurrency stores.” Crypto Trade NET LLC and Crypto Market LLC are the first to receive such licenses and have the designation of local firms.

By virtue of the license, both firms can offer customers online and offline digital asset services. Offline digital asset stores are a novel way for investors to interact with the asset class using mobile banking or cash to trade, says the NAPP.

“Crypto shops are designed to provide easier access for citizens to buy or sell crypto assets,” read NAPP’s statement. The disclosure revealed Kamoliddin Nuritdinov as the single founder and shareholder of Crypto Markets, while Behzod Achilov held the title of the sole shareholder and founder of Crypto Trade NET.

The firms are based in the capital city of Tashkent, and as of press time, none of them have websites offering more information about their operations.

Uzbekistan’s decision to offer new licenses comes months after it banned international exchanges from operating in the country for carrying out unregulated activities. Binance and Huobi were affected by the decision, but there are reports that the exchanges could make a return once regulatory clarity is achieved.

“They have no legal responsibility for transactions with crypto-assets and cannot guarantee the legitimacy of transactions, as well as the proper storage and protection of confidentiality of personal data of citizens of the Republic of Uzbekistan,” said NAPP.

Uzbekistan’s new virtual currency regime

Uzbek President Shavkat Mirziyoyev issued new decrees to regulate the industry in May after years of relative silence. Perhaps, the most important of the decrees is the creation of NAPP from the defunct National Agency for Project Management (NAPM) to exercise total control over the digital asset industry in the country.

The agency wields the powers of developing a unified state policy on virtual currencies and has been charged with combating illicit uses of the asset class.

Mining digital assets have also come under the regulatory crosshairs of the NAPP, as the agency says only mining firms using solar energy will be allowed to operate in the country. NAPP noted that there will be tax exemptions from digital currency obtained via mining in the country, with the catch that trading the assets will only be done on registered exchanges in Uzbekistan.

Watch: The BSV Global Blockchain Convention panel, Law & Order: Regulatory Compliance for Blockchain & Digital Assets