Uzbekistan approves framework for issuing and circulating digital assets

The National Agency for Prospective Projects (NAPP) of Uzbekistan issued an order regulating the issuance, registration and circulation of digital assets within the country.

Document divides digital financial instruments into backed crypto-assets and unsecured tokens.

A crypto-asset is defined as “a property right, comprising a set of digital records in a distributed ledger, having value and an owner”.

Backed tokens include:

• investment token;
• commodity token;
• stable token.

Unsecured (utilitarian) tokens are considered:

• access token; 
• ticket token; 
• token-voucher; 
• governance token.

A separate kind of unsecured crypto-asset is non-fungible tokens (NFT).

Provision of services for issuing, registering, circulating and safekeeping of crypto assets is entrusted to crypto-depositories — legal entities that are residents of Uzbekistan. They maintain an electronic register of issued tokens and secure the rights of their owners.

Issuers of crypto assets may be legal entities or individual entrepreneurs who are residents of Uzbekistan.

They must provide to the crypto-depository a white paper for their project, including:

• issuer data;
• information on the blockchain used and assurances of its security;
• the main characteristics of the crypto asset and the mechanism for transferring ownership of it;
• the asset valuation methodology and information on the procedure for the redemption of backed tokens after the ICO;
• information about risks that may arise from fraud, hacking and other financial crimes;
• the project development roadmap funded by the proceeds from circulating crypto assets;
• additional information defined by local acts of the crypto-depository, including information about advertising of crypto assets.

Trading of crypto assets takes place through private or public sale. The nominal value of issued tokens must be expressed in the national currency.

However, the document prohibits crypto-depositories from registering the issuance of stablecoins and unsecured tokens not included in the above list.

Issuers are also prohibited from using in the name and symbolism of the assets words that could be construed as state support or backing for these financial instruments by the state.

Activities of miners and providers of crypto-related services are possible only after obtaining permission and a license from the regulator.

The document is primarily intended to regulate the issuance of backed investment tokens for residents of Uzbekistan, enabling them to raise funds for their activities.

A NAPP representative told ForkLog in a comment that issuers may issue and sell NFTs on foreign platforms. The only requirement is that proceeds raised from selling cryptocurrency tokens be exchanged into fiat only via domestic service providers.

Earlier in November, issued licenses to cryptocurrency exchanges Crypto Trade NET and Crypto Market.

In August, Uzbekistan’s regulator restricted access to unlicensed Bitcoin exchanges and brokers. Authorities required services to register as service providers to conduct activities in the country.

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