Uzbekistan’s National Agency for Prospective Projects (NAPP) has announced a revision in the fee structure for crypto market participants within the country. The new directive, issued on Tuesday, March 19, 2024, entails substantial fee increases for both crypto exchanges and retailers, reflecting the government’s efforts to capitalize on the growing crypto market.
Under the updated fee system, crypto exchanges operating in Uzbekistan will be subject to a monthly fee of 740 basis reference value (BRV), translating to approximately 251.6 million Uzbekistani som ($20,015). This represents a notable escalation from the previous fee of 400 BRV or 136 million som ($10,819). Similarly, crypto retailers will face an elevated fee of 185 BRV per month, amounting to 62.9 million som ($5,003), compared to the previous fee of 20 BRV, approximately 6.8 million som ($540).
The decision to revise the fee structure comes on the heels of the NAPP’s assessment of the cryptocurrency retail and exchange sectors, deeming them to possess “adequate profitability.” By implementing these fee increases, the agency aims to double the revenue generated from the crypto sector once the new structure is enforced, thereby augmenting the state’s fiscal resources.
Despite the fee hikes, the NAPP assures industry service providers that the updated pricing structure will not jeopardize their financial stability. The directive is scheduled to take effect on June 20, providing a three-month transition period for market participants to adjust to the new regulations.
This development occurs amidst broader initiatives undertaken by Uzbekistan to regulate and capitalize on the burgeoning crypto landscape. The NAPP recently inked a Memorandum of Understanding with stablecoin issuer Tether, signaling a commitment to explore blockchain-based innovations, including stablecoins and digital asset tokenization, within the country. While specifics of the partnership remain undisclosed, Tether has expressed its intent to collaborate with Uzbekistan’s regulators to establish a robust legal and regulatory framework for crypto assets.
Furthermore, the NAPP’s decision to hike fees follows its intention to take legal action against leading crypto exchange Binance for allegedly operating without a license and failing to settle fines. Uzbekistan has imposed stringent regulations on crypto services, permitting only licensed cryptocurrency firms to operate within its jurisdiction. In November 2022, the government granted the first licenses to local crypto firms, signaling a concerted effort to formalize and regulate the crypto industry.
Before licensing, Uzbekistan had restricted access to several international crypto exchanges, including Binance, FTX, and Huobi, citing allegations of unlicensed activities. The government mandates that trading servers for licensed exchanges must be hosted domestically, ensuring compliance with regulatory requirements.
As Uzbekistan navigates the evolving landscape of digital finance, these regulatory measures underscore the government’s commitment to fostering a transparent and sustainable crypto ecosystem while leveraging its potential for economic growth and revenue generation.