Uzbekistan has just taken an unprecedented step towards legalising cryptocurrency exchanges by presidential decree.

The document announcing the new crypto exchange licencing regime includes a set of rules that the trading platforms have to meet before being allowed to operate in the country. For example, they have to establish local offices.

The presidential decree

Uzbekistan Presiden Shavkat Mirziyoyev signed the decree, which follows an earlier executive order issued in July which laid the groundwork for regulation of crypto activities.

The document states that an organisation with an online platform allowing users to trade crypto assets is the very definition of a cryptocurrency exchange in Uzbekistan. It defines crypto assets as a set of records on the blockchain that has value and an owner.

The decree also states that crypto assets and cryptocurrency trading platforms will be regulated by special normative measures and not by current laws that apply to securities and traditional stock and currency exchanges.

The regulatory body and tax exemptions

The National Agency for Project Management under the President is now in charge of reviewing and, when pertinent, approving crypto exchange licences. The agency will also ensure compliance, particularly, in regards to money laundering and terrorism financing.

The administrative decree grants tax exemption on all cryptocurrency transactions carried out by corporate operations and individuals, including foreigners. Firms must have an “authorised capital equivalent to at least 30,000 minimum wages on the day when the application is filed” to be eligible for a crypto trading licence. The rules also require applicants to have the equivalent of 20,000 minimum wages in a separate Uzbekistan commercial bank.

However, as local reports suggest, it’s unclear whether the rules refer to daily or monthly minimum salaries. The minimum wage in January 2018 was $519 (£401) a month.