Eastern Europe is slowly becoming a hub for cryptocurrency and blockchain. Uzbekistan is the latest country to tap this booming market. A new legislative proposal will offer tax benefits to cryptocurrency exchanges active in the country. This is another move toward bringing more legitimacy to the cryptocurrency industry as a whole.
A Positive Environment in Uzbekistan
Most European countries maintain a wait-and-see attitude toward cryptocurrency and blockchain. No active regulatory measures exist, which creates a rather uncertain ecosystem for service providers. Uzbekistan is paving the way for greater cryptocurrency adoption across Eastern Europe. President Shavkat Mirziyoyev has issued an order to provide tax benefits to any domestic Bitcoin exchange.
This rather surprising turn of events shows the government is open-minded toward cryptocurrencies. Any income from Bitcoin or altcoins will not be taxed. Moreover, licensed exchanges are not subject to foreign currency regulations. That is a major breakthrough in terms of attracting such companies to this part of the world. Most importantly, crypto exchanges do not have to adhere to securities and exchanges regulations active in Uzbekistan at this time.
All of this sounds very appealing to cryptocurrency exchanges looking to explore new markets. There is one caveat to take into account, though. Obtaining a license to operate can be done through opening a subsidiary in Uzbekistan. The company must also have an authorized capital of $700,000 or more, and its servers for the subsidiary need to be located in Uzbekistan as well. Those requirements are not insurmountable, yet they may pose a roadblock for some smaller companies.
This move is a rather surprising development in Eastern Europe. Most countries remain on the fence about Bitcoin, primarily due to its volatility and uncertain long-term future. Uzbekistan has always been a bit different in this regard. The country aims to legitimize cryptocurrency and blockchain in the coming years. Opening its borders to foreign investors and companies will play an integral role in achieving that goal.
Uzbekistan is setting a very peculiar precedent for cryptocurrencies in Eastern Europe. Most government officials look to Russia and its impending regulation prior to drafting their own rules. Officials in Uzbekistan are successfully bucking this trend, although it remains to be seen if they can attract a lot of firms. The tax benefits and nourishing regulatory ecosystem offer benefits. However, no one knows how big the country’s cryptocurrency community really is.