Digital asset service providers in Uzbekistan have been ordered to pay monthly fees to prop up the country’s budget. According to official documents from the National Agency of Perspective Projects (NAPP), the Ministry of Finance, and the State Tax Committee of the country, the enforcement of the new regime of charges will begin immediately.
The charges depend on the type of service the firm provides in the country. For example, virtual currency exchanges will pay different fees from miners, while brokers and custodial services will pay different levies to the government.
According to the document, exchanges are required to pay UZS120 million or US$11,000 monthly, while firms that run digital asset stores are expected to pay US$540. The order goes on to impose a monthly charge of US$270 on individual miners, while mining pools running on the country’s electricity grid will pay approximately US$2,700. The demographic with the lowest fee is custodial service providers tasked with paying US$135.
The refusal of firms to pay the stipulated charges comes with grim consequences for service providers, with revocation of licenses being brandished by the regulators.
“Failure to pay the fee within one month constitutes grounds for suspension of the license,” read the order. “If the company does not pay the fee for two months within a year, the license may be canceled.”
For service providers in the industry, the new regime of charges is seen as draconian and insensitive, especially at a time when the industry is reeling from the grim effects of falling prices and a streak of exchanges running into financial troubles.
Eighty percent of the funds accrued from the levy will be channeled to the country’s budget, while the remaining 20% will be deposited to the NAPP, which will allocate it as project funds.
A proactive stance toward digital assets
Uzbekistan has adopted a proactive stance on digital asset regulation, which some quarters have described as a crackdown. In May, President Shavkat Mirziyoyev ordered the NAPP to be the agency in charge of the industry, followed by an instruction that all virtual currency service providers in the industry must be registered with local regulators.
The directive from the president includes strict adherence to Anti-Money Laundering (AML) and Know Your Customer (KYC) processes, while miners were urged to explore the possibilities of renewable energy sources.
A few months after the order, Uzbekistan regulators moved to ban the activities of Binance, FTX, Bybit, and Huobi for failing to comply with extant rules.
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