Uzbekistan Plans to Lift its Cryptocurrency Ban

The National Project Management Agency of the Presidency of the Republic of Uzbekistan, or NAFT, published plans to remove some of the crypto restrictions in the country. The government agency proposed to allow local residents to purchase digital assets for both domestic and foreign currency inside the former Soviet republic.

Will Crypto Return in Uzbekistan?

According to a local report, one of the main government institutions in Uzbekistan – NAFT – intends to lift some of the prohibitions on digital assets and enable its citizens to operate with them. Per the coverage, the institution would allow Uzbeks to conduct ”all types of crypto exchanges involving crypto assets and tokens in exchange for both domestic and foreign currency.”

However, the authorities outlined that the process of trading with cryptocurrencies hides its risks and every individual should deal with them with increased attention.

Furthermore, the intention of NAFT is to create processes for issuing, registering, and circulating digital assets and thus allowing crypto organizations certified in Uzbekistan to develop their own tokens. The report notified that the proposed changes have two weeks discussion period – until May 14th.

Change of Heart

Crypto trading in Uzbekistan has been on and off in recent years. At the end of 2019, cryptocurrency usage in the country was legalized. By that time, the former Soviet republic was showing sympathy towards digital assets and even provided some tax benefits for investors dealing with them.

One year later, though, the President of Uzbekistan changed the country’s stance towards crypto adoption and made it illegal to purchase Bitcoin and any other digital assets. Interestingly enough, the ban had its exceptions as citizens were able to sell them but only if they could prove the cryptocurrencies were initially purchased legally. Failing to do so, any transfers would count as illicit.

Moreover, in January 2020, the Asian country started its first regulated crypto exchange – Uznex. However, the platform is not open for residents of Uzbekistan yet, but if the government indeed reverses the ban, locals might be allowed to take advantage of it.