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Uzbekistan

Retail_Trading_Status

Allowed-Regulated Unknown
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Status Changed

Previous status: Gray-Zone

The primary difference between the two analyses is the change in the identified status of retail cryptocurrency trading in Uzbekistan, from `Gray-Zone` in the previous analysis to `Allowed-Regulated` in the new analysis. This change is justified by several key factors reflecting an evolution in the regulatory landscape, increased clarity, and new developments: 1. Resolution of Ambiguity Regarding Purchase of Cryptocurrencies by Residents: The previous analysis highlighted a significant "buy vs. sell nuance" as a core reason for the `Gray-Zone` status. It noted conflicting information, with some sources suggesting residents were prohibited from purchasing cryptocurrencies even through domestic exchanges, while others indicated buying was allowed post-January 1, 2023. This ambiguity was a major factor contributing to the uncertainty. The new analysis, however, presents a more definitive stance. It clearly states that since January 1, 2023, residents *can* legally engage in buying, selling, and exchanging cryptocurrencies through domestically licensed Crypto Asset Service Providers (CASPs). It also references amendments from November 2021 that allowed residents to conduct all types of crypto-exchange trading. This suggests that the ambiguity previously observed has been resolved, or that newer, more definitive information has become available, confirming the legality of purchasing crypto through the regulated channels. This clarification is a crucial shift, moving the activity out of a gray area. 2. Evolution and Maturation of the Regulatory Framework: While both analyses acknowledge the existence of a regulatory framework under the National Agency of Perspective Projects (NAPP), the new analysis portrays a more mature and actively enforced system. It incorporates more recent developments, such as the introduction of penalties for illegal crypto activities (effective April 2024) and the news of international exchanges like Binance seeking to operate via local licensed partners (January 2025). These developments indicate a regulatory environment that not only permits activity within its rules but also actively polices and penalizes deviations. This active enforcement and the structured entry of international players (albeit through local entities) signal a move beyond a tentative or unclear regulatory stance. 3. Interpretation of Restrictions: The previous analysis viewed the strict limitation of transactions to domestic platforms, coupled with the uncertainty around purchasing, as creating a situation that didn't fit neatly into `Allowed-Regulated`. The restrictions were seen as substantial enough to cast doubt on the overall permissiveness. The new analysis, while still acknowledging the restriction to domestic CASPs and the use of the national currency, interprets these as components of a regulated system rather than indicators of a `Gray-Zone`. Once the ability to buy, sell, and hold through these domestic CASPs is confirmed as legal, the requirement to use licensed domestic entities becomes a standard regulatory control, common in many jurisdictions that regulate crypto, rather than a fundamental ambiguity about the legality of the activity itself. 4. Influence of More Recent Information and Developments: The new analysis is dated later (June 2025, with sources cited up to early 2025) than the previous one (which used sources up to April 2024). This later timeframe allows the new analysis to incorporate more recent regulatory clarifications, enforcement actions, and market developments. For instance, the explicit mention of penalties for illegal acquisition (outside licensed CASPs) reinforces that legal acquisition *within* the system is permitted. The information about Binance's entry strategy also suggests a clearer path for regulated operations. The previous analysis was working with information that still contained unresolved historical ambiguities. In summary, the justification for the change in status from `Gray-Zone` to `Allowed-Regulated` rests on increased clarity confirming that residents are legally permitted to buy, sell, and hold cryptocurrencies through licensed domestic platforms. The regulatory framework has not only been established but is also demonstrably maturing with ongoing developments, enforcement mechanisms, and clearer operational pathways, thereby resolving the key uncertainties that previously defined the situation as a gray zone. The activity is now understood to be allowed, subject to specific, albeit strict, regulations.

Analysis ID
#334
Version
Archived
Created
2025-06-26 09:20
Workflow Stage
Initial Research

Executive Summary

Retail cryptocurrency trading is permitted in Uzbekistan through licensed domestic Crypto Asset Service Providers (CASPs) since January 1, 2023. The National Agency of Perspective Projects (NAPP) regulates CASPs, ensuring AML/KYC compliance. While cryptocurrencies are not legal tender, they are recognized as assets, and income from their transactions is tax-exempt. The government actively monitors and restricts access to unlicensed foreign platforms, with penalties introduced for non-compliance.

Key Pillars

The primary regulator is the National Agency of Perspective Projects (NAPP), which licenses and regulates Crypto Asset Service Providers (CASPs). Core compliance requirements include strict Anti-Money Laundering (AML) and Know Your Customer (KYC) procedures, aligning with Financial Action Task Force (FATF) recommendations. Entities must be legally registered in Uzbekistan and obtain the necessary licenses to operate as CASPs, encompassing crypto exchanges, crypto stores, crypto depositories, and mining pools.

Landmark Laws

Presidential Decree of July 3, 2018: Laid the groundwork for a regulated digital economy and crypto-exchange activities. Amendment to the Criminal Code and Administrative Responsibility Code, effective April 20, 2024: Introduced penalties for illegal acquisition, sale, or exchange of crypto assets and unlicensed CASP activities.

Considerations

Cryptocurrencies are officially recognized and regulated in Uzbekistan but are not considered legal tender. Income from cryptocurrency transactions is tax-exempt for individuals and legal entities, including non-residents. The government warns against using unlicensed platforms and actively blocks access to foreign exchanges not complying with local licensing. Residents are generally restricted to transacting with domestic CASPs using the national currency (Uzbekistani Som), except for the sale of NFTs on foreign platforms.

Notes

In 2019, Uzbekistan initially banned residents from purchasing cryptocurrencies but allowed selling existing holdings. By November 2021, rules were amended to allow all types of crypto-exchange trading in crypto-assets and tokens for the national currency on licensed domestic crypto exchanges. The Central Bank of Uzbekistan emphasizes that cryptocurrencies are not legal tender and are not backed by its assets, though NAPP has clarified that the Central Bank is not the authorized body for regulating crypto-assets. Licensed CASPs are subject to monthly fees payable to the state budget, which were significantly increased in March 2024. Binance is seeking to operate through a local licensed partner, Coinpay.

Detailed Explanation

Uzbekistan legally permits retail cryptocurrency trading for individual citizens and residents, subject to a comprehensive regulatory framework. Since January 1, 2023, residents can only engage in crypto transactions through domestically licensed and registered Crypto Asset Service Providers (CASPs), including crypto exchanges, stores, depositories, or mining pools. Foreign platforms are generally blocked, with unlicensed service provision prohibited; however, Binance is pursuing operations via a local partner, Coinpay. Historically, Uzbekistan's stance shifted: a 2019 ban on purchasing crypto (allowing only sales of existing holdings) preceded a proactive approach initiated by decrees in 2018 to regulate the digital economy and crypto exchanges. By November 2021, amendments allowed residents to conduct all types of crypto-exchange trading on licensed domestic exchanges.

The primary regulatory body is the National Agency of Perspective Projects (NAPP), reporting to the President. NAPP licenses CASPs, develops regulations, and ensures compliance, while the Central Bank of Uzbekistan emphasizes that cryptocurrencies are not legal tender and are not backed by its assets; NAPP clarified the Central Bank is not the authorized crypto regulator. Strict Anti-Money Laundering (AML) and Know Your Customer (KYC) requirements are enforced for all licensed CASPs, aligning with Financial Action Task Force (FATF) recommendations. These mandate customer identification, due diligence, and suspicious transaction reporting to the Department for Combating Economic Crimes at the General Prosecutor's Office; anonymous transactions are prohibited.

Income from crypto transactions is tax-exempt for individuals and legal entities, including non-residents. However, licensed CASPs pay monthly fees to the state budget, significantly increased in March 2024. The government actively warns against using unlicensed platforms, blocking non-compliant foreign exchanges, and introduced penalties in April 2024 for illegal crypto asset activities and unlicensed CASP operations. Residents are restricted to domestic CASPs using the national currency (Uzbekistani Som), except for NFT sales on foreign platforms. Licensed domestic CASPs can transact with non-residents in both national and foreign currencies.

Elliptic reported on October 5, 2023, that cryptocurrencies are officially recognized and regulated in Uzbekistan, though not legal tender, and since January 1, 2023, residents must transact through domestic VASPs. They highlighted the four categories of VASPs and the establishment of internal control rules aligning with FATF Recommendations, regulating KYC procedures and risk-based approaches. Coinfomania reported on June 19, 2025, that cryptocurrencies are not legal tender but can be utilized in investment and trading processes, and that exchanges are required to be licensed, with non-compliant exchanges being fined and unable to serve Uzbek citizens. A recent amendment to the Criminal Code and Administrative Responsibility Code, effective from April 20, 2024, introduced penalties for illegal acquisition, sale, or exchange of crypto assets, as well as providing CASP services without proper licensing. Gazeta.uz reported on January 17, 2025, that from January 1, 2023, individuals and legal entities can only conduct crypto transactions through national service providers, as mandated by a presidential decree of July 3, 2018. Kun.uz reported on January 17, 2025, that NAPP reached an agreement with Binance to provide services through a local partner, Coinpay.

Summary Points

Uzbekistan: Retail Cryptocurrency Trading Regulatory Status (June 2025)

I. Overall Regulatory Status:

  • Allowed-Regulated: Retail cryptocurrency trading is legally permitted for Uzbek citizens and residents, but heavily regulated.
  • Restricted to Licensed Platforms: Since January 1, 2023, residents can only legally buy, sell, and exchange cryptocurrencies through domestically licensed Crypto Asset Service Providers (CASPs).
  • No Legal Tender: Cryptocurrencies are not considered legal tender in Uzbekistan.

II. Key Regulatory Bodies:

  • National Agency of Perspective Projects (NAPP):
    • Primary regulatory body overseeing the crypto industry.
    • Reports directly to the President.
    • Responsible for:
      • Licensing CASPs (crypto exchanges, crypto stores, crypto depositories, mining pools).
      • Developing regulations.
      • Ensuring compliance.
  • Central Bank of Uzbekistan:
    • Not the primary regulator for crypto assets.
    • Expresses a more conservative stance.
    • Emphasizes that cryptocurrencies are not backed by the bank's assets.
  • Department for Combating Economic Crimes at the General Prosecutor's Office:
    • Receives reports of suspicious transactions from CASPs.

III. Key Legislation and Regulations:

  • Presidential Decrees (2018): Laid the groundwork for a regulated digital economy and crypto-exchange activities.
  • Amendments (November 2021): Allowed residents to conduct all types of crypto-exchange trading in crypto-assets and tokens for the national currency on licensed domestic crypto exchanges.
  • Criminal Code and Administrative Responsibility Code Amendments (April 2024): Introduced penalties for illegal crypto activities.

IV. Compliance Requirements:

  • Licensing: CASPs must be legally registered in Uzbekistan and obtain the necessary licenses from NAPP.
  • KYC/AML: Strict Anti-Money Laundering (AML) and Know Your Customer (KYC) requirements are in place for all licensed CASPs.
    • Aligned with Financial Action Task Force (FATF) recommendations.
    • Mandates customer identification, due diligence, and reporting of suspicious transactions.
    • Anonymous transactions are prohibited.
  • Internal Control Rules: CASPs must establish internal control rules aligning with FATF recommendations.

V. Notable Restrictions and Limitations:

  • Domestic CASPs Only: Residents are generally restricted to transacting with domestic CASPs using the national currency (Uzbekistani Som).
  • Foreign Platform Blocking: Foreign cryptocurrency platforms are generally blocked, and providing services to Uzbek residents without a local license is prohibited.
  • Penalties for Non-Compliance: Penalties exist for illegal acquisition, sale, or exchange of crypto assets, as well as unlicensed CASP activities.

VI. Recent Developments and Changes:

  • January 1, 2023: Implementation of the requirement for residents to transact exclusively through domestic CASPs.
  • March 2024: Significant increase in monthly fees payable to the state budget by licensed CASPs.
  • April 2024: Introduction of penalties for illegal crypto activities (acquisition, sale, exchange, unlicensed CASP services).
  • Binance Partnership (January 2025): Binance is seeking to operate in Uzbekistan through a local licensed partner (Coinpay).
  • Tax Exemption: Income from cryptocurrency transactions is currently exempt from taxation for both individuals and legal entities, including non-residents.

VII. Exceptions:

  • NFT Sales: Residents can sell NFTs on foreign platforms.
  • Transactions with Non-Residents: Licensed domestic CASPs can facilitate transactions with non-residents in both national and foreign currencies.

Full Analysis Report

Report on the Current Status of Retail Cryptocurrency Trading in Uzbekistan

Date: 2025-06-26

Topic: Retail_Trading_Status

Description: Assess whether individual citizens and residents in the country are legally permitted to buy, sell, and hold cryptocurrencies. Detail the regulatory environment surrounding this activity (e.g., KYC/AML requirements imposed on platforms, general warnings issued).

1. Identified Current Status:

Allowed-Regulated

2. Detailed Narrative Explanation:

Retail cryptocurrency trading is legally permitted for individual citizens and residents in Uzbekistan but is subject to a comprehensive and evolving regulatory framework. Since January 1, 2023, Uzbek residents can only legally engage in cryptocurrency transactions (buying, selling, and exchanging) through domestically licensed and registered Crypto Asset Service Providers (CASPs). These CASPs can be crypto exchanges, crypto stores, crypto depositories, or mining pools. Foreign cryptocurrency platforms are generally blocked, and providing services to Uzbek residents without a local license is prohibited. However, some international exchanges like Binance are seeking to operate through local licensed partners.

Historically, Uzbekistan's stance on cryptocurrencies has shifted. In 2019, residents were banned from purchasing cryptocurrencies, though they could sell existing holdings. This was followed by a more proactive approach, with decrees in 2018 laying the groundwork for a regulated digital economy and crypto-exchange activities. By November 2021, rules were amended to allow residents to conduct all types of crypto-exchange trading in crypto-assets and tokens for the national currency on licensed domestic crypto exchanges.

The primary regulatory body overseeing the crypto industry is the National Agency of Perspective Projects (NAPP), which reports directly to the President. NAPP is responsible for licensing CASPs, developing regulations, and ensuring compliance. The Central Bank of Uzbekistan, while not the primary regulator for crypto assets, has expressed a more conservative stance, emphasizing that cryptocurrencies are not legal tender and are not backed by the bank's assets. However, NAPP has clarified that the Central Bank is not the authorized body for regulating crypto-assets.

Strict Anti-Money Laundering (AML) and Know Your Customer (KYC) requirements are in place for all licensed CASPs. These rules align with Financial Action Task Force (FATF) recommendations and mandate customer identification, due diligence, and reporting of suspicious transactions to the Department for Combating Economic Crimes at the General Prosecutor's Office. Anonymous transactions are prohibited.

Income from cryptocurrency transactions is currently exempt from taxation for both individuals and legal entities, including non-residents. However, licensed CASPs are subject to monthly fees payable to the state budget, which were significantly increased in March 2024 due to the perceived high profitability of the sector.

The government actively warns citizens against using unlicensed platforms and has taken measures to block access to foreign exchanges that do not comply with local licensing requirements. Penalties for illegal acquisition, sale, or exchange of crypto assets, as well as unlicensed CASP activities, were introduced in April 2024.

While residents are generally restricted to transacting with domestic CASPs using the national currency (Uzbekistani Som), there are exceptions, such as the sale of NFTs, which can be conducted on foreign platforms. Licensed domestic CASPs can facilitate transactions with non-residents in both national and foreign currencies.

3. Specific, Relevant Text Excerpts:

  • Elliptic (October 5, 2023): "Cryptocurrencies are officially recognized and regulated in Uzbekistan, although they are not considered legal tender. Starting on January 1st 2023, residents of Uzbekistan can engage in cryptocurrency transactions exclusively through domestic virtual asset service providers (VASPs)."
  • Elliptic (October 5, 2023): "Only entities that are legally registered in Uzbekistan and have obtained the necessary licenses are permitted to operate as VASPs. There are four distinct categories of VASPs: cryptocurrency exchanges, cryptocurrency shops, cryptocurrency depositories and mining pools."
  • Elliptic (October 5, 2023): "Internal control rules are established for VASPs, aligning with Financial Action Task Force (FATF) Recommendations and regulating the know-your-customer (KYC) procedures and risk-based approach."
  • Coinfomania (June 19, 2025): "Legal Status: Cryptocurrencies are not considered legal tender, but they can be utilized in investment and trading processes."
  • Coinfomania (June 19, 2025): "Regulated Exchanges: In Uzbekistan, cryptocurrency exchanges are required to be licensed as well. The non-compliant exchanges are fined and cannot serve the Uzbek citizens."
  • Crypto Guide Uzbekistan (Praelegal Uzbekistan & Heemera): "Starting on January 1, 2023, residents of the Republic of Uzbekistan can engage in crypto transactions exclusively through domestic Crypto Asset Service Providers (CASPs)."
  • Crypto Guide Uzbekistan (Praelegal Uzbekistan & Heemera): "Residents of Uzbekistan are restricted to buying and selling crypto assets solely through domestic CASPs (with the sole exception being the sale of NFTs, which can be conducted on foreign platforms)."
  • Crypto Guide Uzbekistan (Praelegal Uzbekistan & Heemera): "A recent amendment to the Criminal Code and Administrative Responsibility Code of the Republic of Uzbekistan, effective from April 20, 2024, introduces penalties for various illegal activities related to crypto assets. These include illegal (i.e. outside of domestic licensed CASPs) acquisition, sale, or exchange of crypto assets, providing CASP services without proper licensing..."
  • Daryo.uz (April 3, 2024): "Crypto assets are officially recognized and regulated in Uzbekistan, although they are not considered legal tender. Since January 1, 2023, residents have been permitted to engage in crypto transactions exclusively through domestic CASPs."
  • Daryo.uz (April 3, 2024): "All crypto transactions conducted by individuals or legal entities, including non-residents, are exempt from taxation in Uzbekistan. This exemption extends to the income generated from these operations, which is not considered part of the taxable base for taxation purposes."
  • Gazeta.uz (January 17, 2025): "From 1 January 2023, individuals and legal entities in Uzbekistan can only conduct crypto transactions (buying, selling and exchanging) through national service providers, as mandated by a president’s decree of 3 July 2018."
  • Kun.uz (January 17, 2025): "The National Agency for Perspective Projects of Uzbekistan has reached an agreement with the cryptocurrency exchange Binance to provide services to clients in Uzbekistan through a local partner... Operations will be conducted through Coinpay, a company licensed under the law of the country."

4. Direct, Accessible URL Links to Specific Sources:

Web Sources (16)

Sources discovered via web search grounding

Search queries used (7)
  • Uzbekistan cryptocurrency regulation retail trading
  • Uzbekistan crypto laws for individuals
  • Uzbekistan AML KYC cryptocurrency requirements
  • Uzbekistan central bank statements on cryptocurrency
  • Uzbekistan crypto exchange licensing rules
  • current status of retail crypto trading in Uzbekistan 2024 2025
  • Uzbekistan cryptocurrency legal framework for citizens
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