Uzbekistan has become a platform where a regulatory framework has been formed for the activities of crypto companies

Uzbekistan is a rapidly developing country in Central Asia. According to U.S. News, in 2023, our republic ranked 51st out of 87 among the most powerful and developing countries in the world. 

Uzbekistan has created the necessary regulatory, legal and institutional framework for the implementation of full-scale measures to support business entities and protect their legitimate rights and interests. For example, goal 25 of the New Uzbekistan Development Strategy for 2022-2026 is aimed at identifying the development of the digital economy as the main "driver" with ensuring an increase in its volume by at least 2.5 times. And goal 57 of the Uzbekistan 2030 Strategy is to transform the country into a regional IT hub through the development of digital technologies.
Currently, along with the development of science and technology, the types of entrepreneurial activities are expanding. Mining is among them. Until recently, there was no legal basis for engaging in this type of activity due to the lack of licensing procedures, as well as licensing and notification procedures.
Uzbekistan became one of the first states not only in the CIS, but also in the world, to begin regulating the use of blockchain technology and the turnover of crypto assets as part of the development of the digital economy.
Thus, the decree of the President "On measures for the development of the digital economy and the sphere of turnover of crypto assets in the Republic of Uzbekistan" dated July 3, 2018 established that mining is one of the activities in the field of turnover of crypto assets.
The document says that blockchain technology, artificial intelligence, the use of supercomputer capabilities, as well as activities on crypto assets are one of the directions for the development of the digital economy in many countries.
Moreover, by a decree of the head of state, the National Agency for Project Management under the President of the Republic of Uzbekistan (now the National Agency for Promising Projects of the Republic of Uzbekistan) was designated the authorized body in the field of implementation and development of the digital economy, the relevant requirements for licensing activities in the field of turnover of crypto assets, including the creation of crypto exchanges for trading crypto assets. 
The agency is entrusted with such tasks as the development and implementation of a unified state policy in the field of circulation of crypto assets, ensuring respect for the rights and legitimate interests of investors in the field of circulation of crypto assets, participation in the development and implementation of measures to counteract the legalization of proceeds from crime in the field of turnover of crypto assets, the financing of terrorism and the proliferation of weapons of mass destruction.
At the same time, in accordance with this resolution, a number of documents have been adopted aimed at organizing and regulating the activities of crypto exchanges. As a result of the regulatory and development reforms in this area, in 2019, a corresponding license was issued for the operation of the first crypto exchange, which became an innovation not only for Uzbekistan, but also for neighboring countries.
In addition, the resolution defines the most important tasks for the development of the digital economy:
• implementation and development of activities in the field of turnover of crypto assets, including mining (activities to maintain a distribution platform and create new blocks with the ability to receive remuneration in the format of new units and commission fees in various cryptocurrencies), smart contracts (an agreement in electronic form, the fulfillment of rights and obligations under which is carried out by automatically performing digital transactions transactions), consulting, issue, exchange, storage, distribution, management, insurance, crowdfunding (collective financing), as well as blockchain technologies for the diversification of various forms of investment and entrepreneurial activity;
• training of qualified personnel in the field of development and application of distributed data registry technologies with practical skills in working with modern ICT;
• comprehensive development of cooperation with international and foreign organizations in the field of crypto assets and blockchain technologies, attracting highly qualified foreign specialists in the field of development of distributed data registry technologies for joint implementation of projects in the digital economy;
• creation of the necessary legal framework for the introduction of blockchain technologies, taking into account the best practices of foreign countries;
• ensuring close cooperation between government agencies and business entities in the field of introducing innovative ideas, technologies and developments for the further development of the digital economy.
The document also established other norms. Firstly, transactions 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 income received from these transactions is not included in the tax base for taxes and other mandatory payments. Secondly, currency transactions related to the turnover of crypto assets conducted by persons who have received a license to carry out activities in accordance with the established procedure are not subject to the norms of legislation on currency regulation.
It has been established that in the case of using electricity with connection to a single electric power system:
• payment for the consumed electricity is carried out using an increasing coefficient in the amount of 2 to the established tariff;
• surcharges established by the Cabinet of Ministers of the Republic of Uzbekistan are applied to the corresponding tariffs for electricity consumption during the peak period;
• Electricity consumption is recorded with the installation of a separate metering device.
In addition, President Shavkat Mirziyoyev signed amendments to the laws "On State Duty" and "On Licensing, Licensing and Notification Procedures", which consolidated new types of licensed activities. We are talking about service providers, which include:
• crypto exchange is an organization that provides an electronic platform for the purchase, sale and (or) exchange of crypto assets;
• mining pool is an organization that provides an electronic platform for combining computing power that provides mining of crypto assets;
• cryptodepository - an organization providing an electronic platform and (or) a set of technical and software tools for the provision of services for the issuance of crypto assets, their primary placement and storage;
• cryptomagazine is an organization that provides an electronic platform and (or) a set of technical and software tools for providing services for the purchase and (or) sale of crypto assets.
In accordance with the Regulation on the procedure for issuing permits for mining activities, approved by the order of the Director of the National Agency for Advanced Projects of the Republic of Uzbekistan dated September 20, 2023, the procedure for issuing permits for the implementation and organization of mining activities in the country has been established. 
The regulation outlines the basic rules for the operation of miners, licensing conditions and requirements for them. The procedure for issuing a permit, suspending and canceling it has also been established.
During mining, electricity generated by a photovoltaic plant owned by the miner must be used. In case of connection to a common power supply, a separate meter must be installed.
Hidden mining or mining of anonymous crypto assets is not allowed. The miner must provide NAPP with information about its activities, as well as reporting on operations.
For registration, it is required to submit an application to the agency indicating the basic information about the company, the purpose of the application, and also attach:
• information about the FES installed at the facility and the volume of its generation or an agreement for the supply of electricity;
• documents on mining equipment indicating their energy consumption;
• a list of crypto assets that are planned to be mined and addresses of crypto wallets.
Within 15 days, the NAPPA expert commission must issue an opinion on the application, on the basis of which the agency should make a decision on granting permission or refusal in five days. The permit itself is issued within one day in the form of an electronic certificate with a QR code.
The grounds for refusal can only be:
• providing incomplete information when submitting an application;
• non-compliance with the licensing requirements and conditions (the applicant is given up to 30 days to eliminate deficiencies);
• false or distorted information in the documentation;
• information about the participation of the management and (or) founders of the company in economic crimes (including money laundering), corruption, organized crime.
The validity of the permit may be suspended if the miner commits a violation of the licensing requirements and conditions and does not eliminate it within the specified period. The suspension period is up to ten days (through the court - up to six months).
It is worth noting that as a result of the work carried out to regulate the sphere of circulation of crypto assets, Uzbekistan was rated "more in line" with the Eurasian Group on Countering Money Laundering and Terrorist Financing in the field of crypto Assets. 
It should be noted that mining activity in Uzbekistan is defined as a legitimate type of business activity. The requirements for obtaining a permit for entrepreneurs engaged in this type of activity are also clearly defined.
The Republic has become a unique platform where a regulatory framework has been formed for the activities of crypto companies. There is a single regulator, banking services and pilot projects testing in the regulatory sandbox, tax benefits and a number of preferences are provided.
Bakhtiyar Hidoyatov,
Professor of the Department of TSYUE, Candidate of Law. 
Bahram Khudaibergenov,
Associate Professor of the Department, Doctor of Philosophy in Legal Sciences.