Private Banks Enter Digital Sandbox with Mastercard-Powered Crypto Cards Amid Uzbekistan's Evolving Cryptocurrency Regulations
Uzbekistan has granted approval to two private banks, Kapital Bank and Ravnaq Bank, through the National Agency for Perspective Projects (NAPP), to take part in the digital sandbox aimed at regulating cryptocurrencies. These banks are now authorized to issue plastic crypto cards powered by Mastercard. Recently, on August 14, NAPP announced its approval for Ravnaq Bank's participation in the pilot program, following an earlier confirmation in May 2023 that Kapital Bank would also introduce its own crypto card. The upcoming Uzbeki crypto card, named UzNEX, will provide users with a bank account integrated with access to a crypto exchange and automated exchange mechanism. The card's functionality will be facilitated by Mastercard, one of the world's prominent payment systems. Both Kapital Bank and Ravnaq Bank have until the end of December 2023 to finalize the rollout of their respective crypto cards to customers. These two banks are among the three registered participants within the national digital sandbox.
Since 2023, the Uzbekistani government has restricted the offering of crypto services to licensed cryptocurrency firms. The issuance of the first licenses to local crypto firms took place in November 2022. Prior to this, Uzbekistan had enforced restrictions on access to various major international crypto exchanges, such as Binance, FTX, and Huobi, citing allegations of unlicensed activities. The regulatory framework for cryptocurrencies was initiated by a presidential decree in 2022, leading to the establishment of NAPP to oversee the digital assets sector. This decree also included comprehensive legal provisions concerning cryptocurrency mining operations within the country.