Uzbekistan Issues New License, Signalling Increased Crypto Adoption in the Region

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The former Minister of Foreign Affairs of Uzbekistan tweeted that the National Agency for Perspective Projects (NAPP) of the Republic of Uzbekistan has issued a new regulatory license to ramp up crypto-related activities in the country.

The National Agency for Promising Projects of the Republic of Uzbekistan
has issued licenses for the activities of the crypto store LLC “Paynet Crypto” – a subsidiary of LLC “Uzpaynet” and LLC “C-Base” (owner – Alikulov Alisher Zholbolduevich) pic.twitter.com/Iqw2rEB3oT
— Vladimir Norov (@VladimirNorov) August 10, 2023

The recipient of the latest license is LLP Payment Crypto, a subsidiary of UZPAYNET LLC, and the company responsible for the Paynet Payment system.

With this announcement, Uzbekistan has given voice to its desire to increase the crypto adoption rate in the region and create a crypto-friendly environment that aligns with the country’s regulations.

This news comes after a declaration by Uzbekistan in November 2022 that from January 2023, only licensed cryptocurrency firms would be allowed to operate in the country.

During that time, Uzbekistan issued two crypto licenses to local crypto stores – Crypto Trade NET LLC and Crypto Market LLC.

Based in Tashkent, both crypto stores are operating under single founders. Kamolitdin Nuritidinov is the single founder of Crypto Market, and Crypto Trade NET’s single founder is Behzod Achilov.

2022 Saw Uzbekistan Adopting Special Crypto Framework

Uzbekistan became one of the first countries to progress with crypto regulations by introducing a special crypto framework in 2022.

Signed by Uzbek President Shavkat Mirzyoyev, the new decree instructed the reorganization of the National Agency for Project Management into the National Agency of Perspective Projects.

With the decree, the newly formed NAPP is responsible for introducing a wide range of crypto regulations-related projects to bring about a “special crypto regulation regime” in the country.

Required to develop and adopt a unified policy for crypto, NAPP is also responsible for ensuring investor protection and introducing measures to combat illegal activities tied to crypto trading and mining firms.

Since emerging, NAPP has established legal conditions for entities that rely on blockchain tech and is responsible for issuing the license required to operate as a crypto trading firm in the region, which also requires the firm to pay several state fees, including a fixed personal income tax of a fixed rate of 7.5%.

Uzbekistan’s recent progress toward crypto regulation highlights the adoption rate in the region. Recent reports indicate that the young population in the country is incredibly bullish about crypto.

Start.io showed that there are close to 200,000 crypto investors in the region. 63.1% of those investors are from 25-34 years of age, and 33.8% belong to the demographic aged between 18-24.