In a noteworthy development that is poised to redefine the cryptocurrency sector in Uzbekistan, the National Agency for Prospective Projects (NAPP) has revealed a new mandate aimed at amplifying the monthly operational fees for participants in the crypto market. This announcement was made public on Tuesday, March 19, 2024.
Background: A Revised Fee Framework
The most recent directive from the NAPP introduces a revamped fee system that substantially alters the financial responsibilities of crypto market participants. This amendment builds upon an earlier directive issued by the Ministry of Justice in September 2022, indicating the government’s evolving perspective on cryptocurrency regulation.
Crypto Exchanges: Significant Fee Increases
Under the new fee system, crypto exchanges must now pay a monthly fee of 740 basis reference value (BRV), equivalent to approximately 251.6 million Uzbekistani som ($20,015). This figure represents a substantial escalation from the earlier fee of 400 BRV, or 136 million som ($10,819). The BRV, a vital metric in Uzbekistan, is employed for calculating various financial transactions including taxes, fees, and penalties, underscoring its significance within the regulatory framework.
Crypto Retailers: Steep Fee Hikes
Additionally, crypto retailers face steep enhancements in their monthly fees, which have been set at 185 BRV, or 62.9 million som ($5,003). This figure is a significant jump from the previous fee of 20 BRV, roughly 6.8 million som ($540), underscoring the government’s intent to capitalize on the profitability of the sector.
Doubling Down: Boosting State Revenue
The NAPP’s decision to revise the fee structure stems from an evaluation of “adequate profitability” within the cryptocurrency retail and exchange sectors. By implementing these new fees, the agency aims to considerably enhance state revenue derived from the crypto industry. The expectation is that the revenue generated from the sector will double with the implementation of the new structure, signaling a bullish outlook on the part of the Uzbekistani government regarding the potential of the crypto market.
The NAPP has assured that the updated pricing structure will not negatively impact the financial stability of industry service providers. This consideration reflects a balanced approach, focusing on increasing state revenue while ensuring the continued viability of the crypto market. The new fee structure is slated to take effect on June 20, three months after its official announcement, offering market participants ample time to adjust to the changes.
Uzbekistan’s Regulatory Developments and International Collaborations
The announcement of increased fees arrives against the backdrop of several notable regulatory developments in Uzbekistan’s crypto landscape. Notably, the NAPP recently forged a Memorandum of Understanding with Tether, a leading stablecoin issuer. This partnership aims to investigate and promote blockchain-based innovations in Uzbekistan, including stablecoins and digital asset tokenization. Although specifics of the partnership remain undisclosed, Tether has pledged its commitment to collaborating with Uzbekistani regulators in establishing a comprehensive legal and regulatory framework for crypto assets.
The proactive stance towards regulation and innovation constitutes part of a broader strategy by the Uzbekistani government to cultivate a regulated and thriving crypto ecosystem. The country has taken steps to restrict the provision of crypto services to licensed firms, with the first licenses granted to local crypto companies in November 2022. This regulatory tightening followed restrictions on access to several large international crypto exchanges, such as Binance, FTX, and Huobi, due to allegations of unlicensed activity.
Conclusion
Uzbekistan’s decision to enhance fees for crypto operations represents a significant milestone in the country’s approach to regulating the burgeoning cryptocurrency market. By capitalizing on the sector’s profitability, the government aims to double its revenue, reflecting a self-assured and strategic stance towards the future of digital currencies in Uzbekistan. As the new fee structure prepares to take effect, and with ongoing international collaborations aimed at fostering innovation, Uzbekistan is poised to establish itself as a key player in the global crypto landscape. The delicate balance of regulatory oversight and technological advancement is being carefully navigated, positioning Uzbekistan at the forefront of this rapidly evolving industry.
