Bitcoin will not become legal tender in Uzbekistan, a Central Bank official insists – Regulation

Cryptocurrencies cannot be introduced as a means of payment in Uzbekistan, a senior official at the country's central bank recently said. Speaking to local media, the regulator's representative also noted that national fiat is backed by bank assets, unlike cryptocurrencies. The statement comes despite Tashkent’s crypto-friendly steps in the past.

Cryptocurrency cannot be accepted for payments in Uzbekistan, says monetary authority

Cryptocurrencies like Bitcoin cannot be recognized as legal tender in Uzbekistan and that will likely never change, a central bank official said told position this week. The Deputy Chairman of the Central Bank of the Republic of Uzbekistan ( CBU ) Behzod Hamraev said:

As an economist, I can assume that it [cryptocurrency] will never be equal to world currencies such as dollars, euros, yen, rubles.

The monetary authority representative pointed out that there are currently 28 trillion Uzbek sums (the nation's fiat money) in circulation, all of which are backed by the central bank's assets. “You can even see an inscription of the regulator’s obligations on the banknotes, and the cryptocurrency is not backed by anything,” he added.

The government of Uzbekistan introduced a ban on the use of cryptocurrency for payments into its legislation back in 2019. Under current law, the sum remains the only legal tender in the Central Asian country. A decree from the National Agency for Project Management, a regulatory body responsible for overseeing the digital economy, emphasized:

Crypto assets are not allowed to be used as a means of payment on the territory of the Republic of Uzbekistan.

At the same time, the decree also introduced regulations for the licensing and operation of cryptocurrency exchanges. Crypto trading was legalized in 2018, but in December 2019, authorities effectively forbidden Residents were restricted from purchasing cryptocurrencies on the trading platforms while they were allowed to sell their crypto holdings.

Then, in January 2020, Tashkent announced The plan was to set up a national mining pool as a priority, set up a licensed cryptocurrency exchange where miners would be allowed to sell their digital coins, create a blockchain valley and introduction of crypto tax exemptions. The regulated digital asset platform Uznex, operated by South Korea's Kobea Group, was started later that same month.

The Central Bank of Uzbekistan's latest statement on the status of cryptocurrencies comes after El Salvador became the first country to adopt Bitcoin ( BTC ) as legal tender alongside the US dollar. A similar one also follows opinion by Dmitry Peskov, spokesman for Russian President Vladimir Putin, who recently said Russia was not ready to accept the coin as a means of payment.

Do you think Uzbekistan will change its policy towards cryptocurrencies in the future? Share your expectations in the comments section below.

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