About Face? Uzbekistan Bans Cryptocurrency Purchases

Lawmakers in Uzbekistan have made a sudden decision to ban the purchase of cryptocurrencies in the region.

Securities.io elaborated on the development, stating, “The new legislation bars all citizens from buying digital currencies, even from licensed exchanges.”

Citizens can reportedly sell their cryptocurrency holdings, but only to foreign nationals and only if they, “prove that they gained their crypto through legal means.”

According to Securities.io:

“This stipulation places a heavy burden on traders that have been in operation for years. They will now need to reproduce records of their purchases and trades from potentially a decade ago.”

As well, “(T)he new law states that any asset whose source cannot be proved is now considered illegal.”

The news is being regarded as something of an about-face from a region previously portrayed as a haven for users of and speculators in cryptocurrency.

Securities.io writes that:

“The country was a pioneer in the space as one of the first places to institute exchange licenses and crypto trading. On top of these benefits…The country didn’t tax any revenue made from cryptos. At the time it appeared as if Uzbekistan was to become a crypto hub in central Asia…Unfortunately, it appears that the pro-crypto tide has changed amongst lawmakers from this central Asian country.”

No explanation for Uzbekistan’s policy-change has yet been provided, though Tashkent reported December 19th that Uzbekistan recently held its first parliamentary elections since the country gained independence from the Soviet Union in 1991.

Central bankers in smaller economic regions like Romania have warned that global cryptocoins like Facebook’s proposed Libra currency could fatally perturb financial stability in areas with weaker, non-reserve currencies.

Cryptocurrencies, which can be used for anonymized cross border payments and Dark Net purchases, may also have national security implications.

Nuz.uz claims that Uzbek legislators will continue to support “blockchain” technology, a type of distributed database similar to ones that form the backbone of cryptocurrency systems like Bitcoin, but which may also have applications outside financial services.



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