Uzbekistan allows two banks to issue crypto cards.

Uzbekistan allows two banks to issue crypto cards.

The Growth of Blockchain Technology in Uzbekistan

In recent years, the field of blockchain technology has witnessed significant growth and adoption worldwide. One country that stands out in this regard is Uzbekistan, as it has made substantial strides in embracing digital assets and cryptocurrencies. Recently, two prominent private banks in Uzbekistan, Kapital Bank and Ravnaq Bank, received approval from the National Agency for Perspective Projects (NAPP) to participate in the digital sandbox of crypto regulation. This development marks a significant step forward for the blockchain industry in Uzbekistan.

Plastic Crypto Cards and Partnership with Mastercard

In their pursuit of digital innovation, Kapital Bank and Ravnaq Bank have announced plans to issue plastic crypto cards powered by Mastercard. These crypto cards, named UzNEX, will integrate a bank account with access to a crypto exchange and an automated exchange mechanism. By partnering with Mastercard, one of the world’s leading payment systems, these banks are set to provide their customers with a seamless and secure way to engage in cryptocurrency transactions.

The National Digital Sandbox

The NAPP’s approval of Kapital Bank and Ravnaq Bank to participate in the national digital sandbox further demonstrates Uzbekistan’s commitment to fostering blockchain technology. The digital sandbox serves as a controlled environment where banks and other financial institutions can test and develop innovative solutions using blockchain and other emerging technologies. By encouraging collaboration and experimentation, the sandbox enables participants to gain practical knowledge and insights that can help shape future regulatory frameworks and industry standards.

Regulatory Framework and Licensing

Uzbekistan’s regulatory approach to cryptocurrencies began with a presidential decree in 2022, which led to the establishment of the NAPP. This agency was tasked with overseeing the digital assets industry and implementing comprehensive legal details related to cryptocurrency mining operations in the country. Moreover, starting from 2023, the provision of crypto services has been restricted to licensed cryptocurrency firms. The government granted the first licenses to local crypto firms in November 2022, signaling its commitment to developing a robust and regulated crypto ecosystem.

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Restricting Access to International Crypto Exchanges

Before implementing its regulatory measures, Uzbekistan faced challenges related to unlicensed activity in the crypto space. As a result, the country restricted access to several major international crypto exchanges, including Binance, FTX, and Huobi. This move was intended to protect investors and ensure the integrity of the financial system. By prioritizing the licensing of local crypto firms, Uzbekistan aims to create a safe and transparent environment for cryptocurrency trading and investment.

Conclusion

The involvement of Kapital Bank and Ravnaq Bank in the national digital sandbox and their partnership with Mastercard to issue plastic crypto cards signal the progressive stance of Uzbekistan towards blockchain technology and cryptocurrencies. This strategic decision not only offers customers convenient access to cryptocurrency markets but also lays the groundwork for the country to become a hub for blockchain innovation in the region. With its well-defined regulatory framework and commitment to supporting emerging technologies, Uzbekistan is poised to play a significant role in shaping the future of the blockchain industry.

Related: Binance launches regulated platform in Kazakhstan amid troubles in the West

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