Authorities in Uzbekistan are sticking to their guns on a crypto payments ban that surfaced in 2019. Reversing the ban is not something they would likely ever consider, noted deputy chairman of the country’s apex bank, Bezhod Khamraev. The deputy chairman asserted that cryptocurrencies like Bitcoin will never become payment means within the country.
While speaking, Khamraev did not fail to take a swipe at Bitcoin reiterating that it is backed by nothing. According to the deputy chairman, Bitcoin can never measure up to fiat currencies such as US Dollar, the euro, Japanese Yen or even the Russian Ruble. Khamraev highlighted the speculative nature of Bitcoin citing why it can never become a payment means for Uzbekistan.
Deputy Chairman Says Bitcoin Not Backed By Anything
Comparing Bitcoin to Som, Uzbekistan’s official currency, Khamraev revealed that the circulating supply of the latter is known to be 28 trillion and each of them is backed by the Central Bank of Uzbekistan. In contrast, Bitcoin is not backed by anything, whether commodity or fiat.
In a daring move in 2019, Uzbekistan officially banned payments in cryptocurrencies at the behest of the director of the National Agency for Project Management (NAPM) and the country’s president at the time. The order bearing the ban said that crypto payments cannot be sent or received within Uzbekistan territory.
Back in April, the NAPM announced that it was going to allow locals to engage in crypto trading services, enabling them to exchange cryptocurrencies against national and foreign currencies.
Uzbekistan’s payments ban stands in sharp contrast with El Salvador’s recent decision to make bitcoin a legal tender. Perhaps the risks associated with cryptocurrencies is what authorities in Uzbekistan are considering. One of the major concerns is the threat of destabilization digital currencies pose to a country’s economy. On its part, El Salvador hopes to address the challenge of high remittance costs with Bitcoin as revealed by president Nayib Bukele.
Uzbekistan Receives Some Miners from China
Interestingly, Uzbekistan boasts cheap electricity along with its sister country Kazakhstan, which attracted some of the migrating miners from China in the wake of a ban in May. Now, both countries harbor a significant portion of Chinese miners who are as well mandated to pay taxes. As such, both countries are generating revenue from crypto mining.
Crypto payments are becoming common despite the growing reservations held against them. Apart from ensuring speedy transactions, they enable users to spend less when paying for goods and services.