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Crypto Fees Hiked to Boost State Revenue, Regulates Market with New Licensing Mandate

The Uzbekistan National Agency for Prospective Projects (NAPP) announced an increase in monthly fees for cryptocurrency market participants on March 19, 2024.

This move revises an initial directive from the Ministry of Justice back in September 2022, aimed at enhancing the financial contributions from the crypto sector to state revenues.

This decision comes after NAPP’s evaluation of the sector’s profitability, leading to a new fee structure affecting crypto exchanges and retailers alike.

Crypto exchanges in Uzbekistan will now incur a monthly fee of 740 basic reference values (BRV), equivalent to about 251.6 million Uzbekistani som ($20,015), a significant hike from the previous 400 BRV or 136 million som ($10,819).

The BRV, a unit used for calculating various financial obligations like taxes and fines, has thus become a more substantial burden for these businesses.

Similarly, the fees for crypto retailers have risen sharply to 185 BRV per month, translating to 62.9 million som ($5,003), up from a mere 20 BRV or about 6.8 million som ($540) previously.

NAPP’s rationale behind these adjustments is to double the revenue from the crypto sector while ensuring these changes do not adversely affect the service providers’ financial health.

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The revised fee system is set to be implemented on June 20, giving stakeholders three months to adjust.

This regulatory adjustment follows a Memorandum of Understanding between NAPP and Tether, focusing on fostering blockchain innovations within Uzbekistan, such as stablecoins and digital asset tokenization.

Although the finer details of this partnership remain confidential, Tether has expressed its commitment to working with local authorities to develop a conducive legal and regulatory environment for crypto assets.

Additionally, this development is in line with NAPP’s legal action against Binance for operating without a proper license and failing to settle fines. Uzbekistan mandates that all crypto exchanges operate with a license and house their trading servers within the country.

This policy, enforcing licensed operation of crypto services, was established in 2023, with the first batch of licenses awarded in November 2022.

Prior to this, Uzbekistan had already restricted access to major international crypto exchanges like Binance, FTX, and Huobi over unlicensed activities accusations.

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Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

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