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Uzbekistan Raises Blockchain Charges, How is Crypto Doing in Central Asia?

Last Updated March 21, 2024 2:03 PM
Shraddha Sharma
Last Updated March 21, 2024 2:03 PM
By Shraddha Sharma
Verified by Peter Henn

Key Takeaways

  • Uzbekistan’s National Agency for Prospective Projects doubles fees for cryptocurrency exchanges and retailers.
  • The revised fee structure aims to capitalize on the sector’s “profitability.”
  • Central and Southern Asia’s crypto market is showing growth, trailing just behind North America and Europe.

Uzbekistan has announced a new set of regulations that will double the operational fees for cryptocurrency exchanges and retailers within the nation. This decision, by the National Agency for Prospective Projects (NAPP), reflects the government’s aim to leverage the growing crypto market for increased revenue. The updated regulations build upon a directive from September 2022 as the Central Asian crypto market clocks growth.

Uzbekistan’s Fee Hike

Uzbekistan’s recent regulatory update  focuses on the increase in the fees imposed on crypto exchanges. As a result, the monthly fee for crypto exchanges has surged to 740 basis reference values (BRV), a metric which translates to approximately 251.6 million Uzbekistani som ($20,015). The adjustment is reportedly a leap from the prior fee of 400 BRV, or 136 million som ($10,819).

The March 20 release says: “This resolution comes into force after three months from the date of its official publication.”

The NAPP’s decision to revise the fee framework stems from the sector’s potential “profitability” within the exchange and retail sectors. By implementing a more demanding fee structure, the agency anticipates increased revenue.

Crypto in Central Asia

The regulatory shift in Uzbekistan emerges amid a broader crypto market growth in Central & Southern Asia. According to data  from Chainalysis, the region represents the third-largest crypto market globally, narrowly trailing behind North America and Central, Northern, & Western Europe. Central & Southern Asia and Oceania (CSAO) accounts for nearly 20% of worldwide crypto transactions.

Uzbekistan's Position in Asia | Source: Chainalysis
Uzbekistan’s Position in Asia by Crypto Value | Source: Chainalysis

Projections from Statista further illuminate the vibrant crypto economy in Central Asia. The region’s crypto market revenue is expected to hit $72.8 million in 2024, while the expected annual growth rate stands at 9.39%. As a result, Central Asia is anticipated to reach a total revenue of $104.3 million by 2028. Additionally, the average revenue per user is forecasted to be $19.1 in 2024, while the number of users is projected to reach 4.82 million by 2028 in the region.

Will it Affect Revenue?

The purpose of Uzbekistan’s fee hike is to capture the rapidly expanding market. The fresh regulatory framework also reflects the profitability and growth potential of the crypto sector in Central Asia.

The success of Uzbekistan’s fee hike for revenue will also hinge on its competitive position, especially when other Asian countries outpace Uzbekistan when it comes to crypto adoption.

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