Uzbekistan Approves Two Banks for Crypto Mastercard Issuance

Uzbekistan Approves Two Banks for Crypto Mastercard Issuance

Uzbekistan embraces the digital age, empowering local banks to roll out cryptocurrency payment cards for users to spend their cryptocurrency. The pilot project initiative is intended to launch virtual cards that enable users to tap into their cryptocurrency wallets in an exchange for converting them into fiat currency. 

Uzbekistan Banks to Launch Virtual Cards 

The National Agency of Perspective Projects (NAPP), a regulatory body under the supervision of the presidential administration has approved two banks to issue bank cards for cryptocurrency payments, which marks a significant leap towards seamless transactions and financial innovation in Uzbekistan.

NAPP announced the approval of Ravnaq Bank to launch virtual cards that enable users to tap into their cryptocurrency holdings for real-world purchases as part of the pilot project. However, earlier this month, the regulatory body confirmed that Kapital Bank will also join the pilot project as reported by the Russian crypto news agency, Bits.media. 

In a recent announcement, NAPP confirmed its collaboration with Ravnaq Bank, commencing a pilot project named "Crypto Card: Uznex."  It will feature “automated replenishment of a bank card account with cash through the accelerated sale of crypto assets located in a crypto wallet opened on a partner’s crypto exchange for settlement operations,” the regulator said.

NAPP, which is under the administration set up of President Shavkat Mirziyoyev laid the foundation for crypto asset issuance, and circulation in the Central Asian nation. The government of Uzbekistan is fostering a licensing framework for authorized digital asset exchanges. 

The national agency has introduced a licensing framework for crypto trading platforms and five digital asset exchanges that are operational in the country, including the state-controlled Uznex. Regulatory officials in Tashkent have largely restricted access to international sites offering similar services.

New Gateway for Crypto Spending 

The introduction of cryptocurrency payment cards ushers in a new era of financial possibilities. While the legal framework in Uzbekistan does not currently recognize cryptocurrencies as official means of payment, the collaboration with Mastercard ensures that these innovative cards become a gateway for crypto spending. 

The significance of this innovation becomes even more pronounced as Uzbekistan's residents gain the ability to transact with cryptocurrencies through their Mastercard-backed cards. The upcoming launch, scheduled for the close of December, promises to redefine how people experience digital finance.

Starting from the dawn of 2023, Uzbekistan's citizens and businesses will have the privilege to trade crypto assets, albeit exclusively on platforms regulated by locally regulated service providers. Notably, this stride towards financial modernization gained momentum in June, with the country's first crypto depository license issued to a subsidiary of UAE-based brokerage firm Lockton Solution.

Do you think Uzbekistan will authorize more banks to issue crypto payment cards? Please share your thoughts and opinions in the comments section below.