The new trend of countries approving bitcoin as a means of payment doesn’t seem to excite the financial regulators in Uzbekistan after a top member of the central bank warned the country would not adopt cryptocurrency as legal tender.
While addressing a local media platform, the official argued that Uzbekistan’s national currency is backed by assets of the Central Bank, unlike cryptocurrencies.
“Now there are about 28 trillion soums in circulation, and all of them are backed by the Central Bank’s assets. You can even see an inscription on the obligations of the regulator on banknotes, and the cryptocurrency is not backed by anything” Central Bank Deputy Chairman Behzod Khamraev told local news platform Spot.
Why Uzbekistan will not adopt cryptocurrency as legal tender
Continuing his statement, Behzod Khamraev insisted that Uzbekistan cannot adopt cryptocurrency as legal tender because it cannot be equated to other established currencies.
“As an economist, I can assume that it [cryptocurrency] will never be equal to world currencies such as the dollar, euro, yen, ruble.”
Uzbekistan legalized crypto trading in 2018, but later in 2019 it banned cryptocurrency as legal tender and introduced laws to regulate the licensing and operations of crypto exchanges.
El Salvador became the first country to adopt cryptocurrency as legal tender and some other countries in the Latin America and Central America region are looking to explore the space.