Uzbekistan ‘no plans’ to overturn digital currency payments ban

Uzbekistan ‘no plans’ to overturn digital currency payments ban

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The central Asian country of the Republic of Uzbekistan has no plans to overturn a ban on digital payments, in keeping with previous statements from significant authorities in the country.

The Deputy Chairman of the Central Bank of Uzbekistan (CBU), Behzod Khamraev, highlighted BTC in particular, saying local authorities in the country will never allow payments to be made in BTC.

In an interview with local press, Khamraev said BTC could not be officially sanctioned because it was “backed by nothing,” and was purely “speculative”—therefore could never be treated with parity to currencies like the U.S. dollar, the euro, and the Russian ruble.

The senior official said there were currently 28 trillion Uzbekistani soms in circulation in the country, which were fully backed by the central bank.

The comments come after El Salvador adopted BTC as a form of legal tender on September 7, leading to significant protests and unrest in the country since.

Noting the distinction between digital currency and fiat money, Khamraev pointed to the inscription on the country’s banknotes.

“One can even see an inscription about the regulator’s obligations on the banknotes, while cryptocurrency is not backed by anything.”

Authorities in Uzbekistan announced, “Crypto assets cannot be used as a method of sending or receiving payments on the territory of the Republic of Uzbekistan,” in an order mandated back in late 2019.

The National Agency for Project Management (NAPM) subsequently suggested the country may want to legalize digital currency trading in some circumstances to allow fiat to digital currency transactions, though this view has clearly yet to find traction in the upper levels of the country’s central bank management.

With the latest commons from the CBU’s deputy governor, it looks as though the Uzbekistani digital currency sector could be waiting for some time to come.

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