In a significant development that’s set to reshape the cryptocurrency landscape in Uzbekistan, the National Agency for Prospective Projects (NAPP) has unveiled a new directive aimed at increasing the monthly operational fees for participants in the crypto market.
The move, announced on Tuesday, March 19, 2024, marks a pivotal moment for the sector, promising to double the revenue generated from it. Here’s a closer look at the implications of the directive and what it means for the future of cryptocurrency operations in Uzbekistan.
Revised fee structure: A closer look
The latest directive from the NAPP introduces a revised fee framework that significantly alters the financial obligations of crypto market participants. The amendment builds upon a previous directive initiated by the Ministry of Justice in September 2022, reflecting the government’s evolving stance on cryptocurrency regulation.
Under the new fee system, crypto exchanges are now required to pay a monthly fee of 740 basis reference value (BRV), which translates to approximately 251.6 million Uzbekistani som ($20,015). It represents a substantial increase from the prior fee of 400 BRV, or 136 million som ($10,819). The BRV, a critical metric in Uzbekistan, is utilized for calculating various financial transactions, including taxes, fees, and fines, underscoring its importance in the regulatory framework.
Similarly, crypto retailers are facing a steep hike in their monthly fees, which have been set at 185 BRV, or 62.9 million som ($5,003). It is a significant jump from the previous fee of 20 BRV, roughly 6.8 million som ($540), highlighting the government’s intent to leverage the profitability of the sector.
Doubling down on crypto revenue
The NAPP’s decision to revise the fee structure is driven by an assessment of the “adequate profitability” within the cryptocurrency retail and exchange sectors. By introducing these new fees, the agency aims to significantly boost 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.
Moreover, the NAPP has assured that the updated pricing structure will not adversely affect the financial stability of industry service providers. The consideration indicates a balanced approach, aiming to increase state revenue while ensuring the continued viability of the crypto market. The new fee structure is scheduled to take effect on June 20, three months after its official announcement, providing market participants with a window to adjust to the changes.
Uzbekistan’s regulatory developments and international collaborations
The announcement of the increased fees comes in the wake of several significant regulatory developments in Uzbekistan’s crypto landscape. Notably, the NAPP recently signed a Memorandum of Understanding with Tether, a leading stablecoin issuer. The partnership is set to explore and promote blockchain-based innovations in Uzbekistan, including stablecoins and digital asset tokenization. While specific details of the partnership remain under wraps, Tether has expressed its commitment to working with Uzbekistani regulators to establish a comprehensive legal and regulatory framework for crypto assets.
The proactive stance towards regulation and innovation is part of a broader strategy by the Uzbekistani government to foster 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 issued to local crypto companies in November 2022. The regulatory tightening followed restrictions on access to several large international crypto exchanges, including Binance, FTX, and Huobi, due to allegations of unlicensed activity.
Conclusion
Uzbekistan’s decision to increase fees for crypto operations marks a significant milestone in the country’s approach to regulating the burgeoning cryptocurrency market. By leveraging the sector’s profitability, the government aims to double its revenue, reflecting a confident 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 positioning itself as a key player in the global crypto landscape, balancing regulatory oversight with the promotion of technological advancement.
