The state is taking large-scale measures to develop the digital sector of the economy. Electronic document management systems are being introduced, electronic payments are being developed, and the regulatory framework in the field of electronic commerce is being improved.

The digital economy functioning on information technology platforms is developing at an intensive speed rate, which necessitates the creation of new models of such platforms.

Distributed ledger technology, “Artificial Intelligence”, the use of the capabilities of supercomputers, as well as activities on crypto-assets are one of the directions for the development of the digital economy in many countries of the world. Distributed ledger technology is gradually being introduced not only into many sectors of the economybut also into the public administration system and other public relations.

In order to further improve the public administration system, create conditions for the introduction and development of the digital economy, improve the investment environment, as well as implement the Action Strategy in five priority areas for the development of the Republic of Uzbekistan in 2017 — 2021:

1. The most important tasks for further improvement of the sphere of crypto-assets turnover shall be:

implementation and development of activities in the sphere of crypto-assets turnover, including mining (activities to maintain the distribution platform and create new blocks with the ability to receive remuneration in the form of new units and commission fees in various crypto-assets), smart contracts (an agreement in electronic form, the fulfillment of rights and obligations under which is carried out by automatically making digital transactions), consulting, emission, exchange, storage, distribution, management, insurance, as well as distributed ledger technologies for diversifying various forms of investment and business activities:

training of qualified personnel in the field of development and use of distributed ledger technology with practical skills in working with modern information and communication technologies;

comprehensive development of cooperation with international and foreign organizations in the field of crypto-assets and distributed ledger technology, attracting highly qualified foreign specialists in the development of distributed ledger technology for the joint implementation of projects in the digital economy;

creation of the necessary legal framework for the implementation of distributed ledger technology, taking into account the best practices of foreign countries;

ensuring close interaction between state bodies and business entities in the field of introducing innovative ideas, technologies and developments for further development of the digital economy.

2. It shall be established that:

specific areas of activity in which distributed ledger technologies are being introduced are determined by the National Agency of Perspective Projects of the Republic of Uzbekistan (hereinafter referred to as the Agency) on the basis of proposals of interested ministries and departments;

draft regulations and technical terms of reference aimed at the development of the sphere of crypto-assets turnover and the introduction of distributed ledger technology are subject to mandatory examination by the Agency;

the crypto-assets turnover is regulated by special regulatory legal acts;

operations of legal entities and individuals related to the turnover of crypto-assets, including those carried out by non-residents, are not subject to taxation, and the income received from these operations is not included in the taxable base for taxes and other obligatory payments;

foreign exchange transactions related to the turnover of crypto-assets, carried out by persons who have received under the established procedure a license to carry out activities in the sphere of crypto-assets turnover, are not subject to the norms of legislation on currency regulation.

3. It shall be established that:

a) a crypto-asset is a property right, which is a set of digital records in a distributed data registry, which has a value and an owner;

b) the types of activities in the sphere of crypto-assets turnover are:

mining;

activities of service providers in the sphere of crypto-assets turnover (hereinafter referred to as the service providers);

c) mining is the activity of maintaining a distributed data registry, creating and confirming the integrity of blocks by performing computational operations.

Mining is carried out exclusively by a legal entity using electricity produced by a solar photovoltaic station.

In the case of using electricity with connection to a single electric power system:

payment for consumed electricity is carried out using a multiplier of 2 to the established tariff;

for electricity consumption during the peak period, surcharges established by the Cabinet of Ministers are applied to the relevant tariffs;

electricity consumption is accounted for with the installation of a separate metering device.

Mining is subject to mandatory registration by the Agency and is not a licensed activity.

Persons engaged in mining (miners) are required to register in accordance with the procedure established by legislative acts.

Registration of miners is carried out exclusively in electronic form via the Internet.

Miners have the right to carry out their activities exclusively at the address specified during registration, in compliance with fire safety and sanitary norms and procedures;

d) service providers provide services for individuals or legal entities, including on their behalf, for the purchase, sale and (or) exchange, storage, release, placement and management of crypto-assets.

Service providers can only be legal entities — residents of the Republic of Uzbekistan.

Types of service providers:

crypto-exchange — an organization that provides an electronic platform for the purchase, sale and (or) exchange of crypto-assets;

mining pool — an organization that provides an electronic platform for the consolidation of computing power to support the mining process;

crypto-depository — an organization that provides an electronic platform and (or) a set of technical and software tools for the provision of services for the issuance of crypto-assets, their initial placement and storage;

crypto-shop — an organization that provides an electronic platform and (or) a set of technical and software tools for the provision of services for the purchase and (or) sale of crypto-assets;

other types of service providers determined by the decisions of the Agency;

e) from January 1, 2023, citizens and legal entities of the Republic of Uzbekistan can carry out transactions for the purchase, sale and (or) exchange of crypto-assets exclusively through national service providers in the manner prescribed by legislative acts;

f) The Agency shall establish the procedure for:

licensing and other permissive procedures in the sphere of crypto-assets turnover;

the issue, registration of issue, and crypto-assets turnover by residents of the Republic of Uzbekistan;

g) the amount and procedure for paying the state fees for issuing a license to carry out activities in the sphere of crypto-assets turnover are determined by the Agency;

h) the entire amount of the state fees for issuing a license to carry out activities in the sphere of crypto-assets turnover is credited to the personal account of the licensing authority;

i) licensing requirements and conditions for the activities of service providers are:

the presence of an electronic platform and (or) a set of hardware and software located on servers located on the territory of the Republic of Uzbekistan;

storage for five years of information on all transactions with crypto-assets, on identification data of platform participants, materials on the relationship between the service provider and platform participants (including between platform participants), including business correspondence;

compliance with the requirements of the legislation of the Republic of Uzbekistan in the sphere of crypto-assets turnover, countering the legalization of proceeds from crime, the financing of terrorism and the financing of the proliferation of weapons of mass destruction, as well as the storage and use of personal data;

compliance with the requirements for advertising in the sphere of crypto-assets turnover, including the prohibition of promising the effectiveness (profitability) of activities related to the use of crypto-assets, the content of information about transactions with crypto-assets as an easy way to enrich, as well as the possibility of using crypto-assets on the territory of the Republic of Uzbekistan as a means of payment or payment acceptance;

prohibition to carry out operations with anonymous crypto-assets;

provision of information free of charge at the request of the authorized body related to the implementation of the activities of the platform;

other requirements in accordance with legislative acts.

Additional licensing requirements and conditions for crypto exchanges are:

implementation of quotations for crypto-assets based on the ratio of supply and demand for them;

the presence of formed charter capital in the amount of at least five thousand basic estimated units in the form of funds as of the date of application, of which three thousand are reserved on a separate account in a commercial bank of the Republic of Uzbekistan;

j) the functions of monitoring the activities of service providers in terms of their compliance with legal acts on combating the legalization of proceeds from crime, the financing of terrorism and the financing of the proliferation of weapons of mass destruction are assigned to the body licensing the activities of service providers and the relevant authorized state bodies;

k) the charter capital of service providers is formed exclusively from the funds and other property of its founders. The use of funds received on credit or secured, and other attracted funds for the formation of the charter capital of service providers is not allowed;

l) for the implementation of activities in the sphere of crypto-assets turnover, legal entities pay fees. Fees are distributed between the State Budget of the Republic of Uzbekistan and the Agency.

The amount of fees, the procedure for their payment and distribution are carried out in accordance with the procedure approved by the Agency together with the Ministry of Finance and the State Tax Committee of the Republic of Uzbekistan;

m) miners operating with the use of equipment and installations of solar photovoltaic stations have the right to enjoy tax, customs and other benefits and preferences in the field of the use of renewable energy sources in the manner prescribed by legislative acts;

n) if facts of illegal connection of persons engaged in mining to the unified energy system are revealed, the established tariff is applied to them with a multiplying factor of 5;

o) licenses for the operation of crypto-exchanges issued before January 1, 2022, are re-issued taking into account the requirements of this resolution, without the collection of state duties and fees.

4. Grant service providers the right to:

receive remuneration for the services provided, including crypto-assets, establish its amount and the procedure for collecting it from customers;

organize transactions with residents and non-residents of the Republic of Uzbekistan aimed at the acquisition and (or) alienation of crypto assets for national and foreign currency, as well as the exchange of crypto assets for other crypto assets.

6. It is prohibited to:

a) carry our management of service providers by:

persons involved or suspected of participating in terrorist activities or proliferation of weapons of mass destruction;

persons who have an outstanding or unexpunged conviction for committing economic crimes, as well as crimes related to the legalization of proceeds from crime, terrorism and the proliferation of weapons of mass destruction, as well as their financing, organized crime, drug trafficking, corruption and information technology;

b) participate in the charter capital of the service provider for:

the persons specified in subparagraph "a" of this paragraph;

companies registered in offshore zones;

c) use the crypto-assets on the territory of the Republic of Uzbekistan as a means of payment or payment acceptance;

d) implement covert mining (activities for the implementation of mining on the computing power of third parties without their knowledge or consent using special software) and mining of anonymous crypto-assets (crypto-assets operating on the principle of anonymity).

7. The Agency, taking into account the requirements of this resolution, shall ensure:

a) adoption and implementation of the Regulations on licensing the activities of service providers in the sphere of crypto-assets turnover, the Regulations on the procedure for registering the mining of crypto-assets, the Regulations on the procedure for issuing, registering the issue and turnover of crypto-assets by residents of the Republic of Uzbekistan and the Regulations on the procedure for registering participants of Special Regulatory Regime in the Sphere of Crypto Assets Turnover (Special Regulatory Sandbox Regime);

b) together with interested ministries and departments, submit proposals to the Administration of the President of the Republic of Uzbekistan on amendments and additions to the laws of the Republic of Uzbekistan On State Fees and On Licensing, Permitting and Notifying Procedures.

8. The responsibility to execute control over the implementation of the present resolution shall be assigned the Prime Minister of the Republic of Uzbekistan A.N. Aripov and Director of the National Agency of Perspective Projects of the Republic of Uzbekistan D.R. Lee.