The Government of Uzbekistan has been facing pressure from the general public that the Government should seriously consider adopting Bitcoin by allowing it to merge within the country’s financial system under a “Legal tender” as has been done by El Salvador. But the country’s central bank’s key official has said that Uzbek Government does not wish to lend any “legal tender” to either of cryptocurrencies, including Bitcoin. He further claims that even if the Government does, then the country’s official bank will not be able to back any sort of digital currency.
It has been clarified by Central Bank of Uzbekistan’s (CBU’s) Dy. Chairman that the bank is not interested in any of digital currencies. He claimed that CBU won’t be allowing any sort of “legal tender” to any virtual currency, even if it involves Bitcoin. Behzod Hamraev, Dy. Chairman CBU, commented that having worked as an experienced economist, he will never regard virtual currency as that of fiat. Digital currency can never replace a national currency nor can it even come close to be an alternate of fiat. Bitcoin cannot compete with the world currencies like USD, GBP, Euro, etc. because all these world currencies are tested time and again. In the case of Bitcoin, it hasn’t be put to test, until the country of El Salvador has taken the challenge and is in its early stage of testing.
Hamraev said that approximately 28 trillion of the national currency is presently circulating in the local and global markets. All of this money is fully backed by none other than CBU, being the national and central bank of Uzbekistan. How the Uzbek Government can embrace a digital currency that isn’t backed by any institution at all, commented Hamraev.
He then clarified that those advocating that Uzbek should follow El Salvador’s example should stop interfering in something they do not understand. In addition, he reminded the public in general that the use of crypto as payment in the country is officially banned by the Government. No one in the country is allowed to transact using virtual currencies and disregard national currency.
The said ban on crypto stemmed from an official decree passed by the country’s regulation namely National Agency for Project Management. The ban was implemented in the year 2019 and there hasn’t been any change in the status quo.
However, there was a time when crypto use was not banned in Uzbekistan. In fact, crypto trading, as well as investment, was legalized in Uzbekistan through the law in 2018. There was no restriction upon anyone in Uzbekistan if they wanted to invest in and trade cryptocurrencies. Even Uzbek investors were not estopped from subscribing to crypto exchanges for the purposes of pursuing their crypto objectives. Yet the ban was imposed in 2019 and all crypto activities came to a stand-still in Uzbekistan.
In 2020, there was a pact called arrived at between the Uzbek Government and a Korean crypto firm. Under the pact, an exception was made and a national crypto trading platform namely Unzex was allowed to be created. This very national crypto trading platform is still functioning and allowing crypto investors to purchase virtual coins directly from the miners.