Tajikistan to get crypto rules by 2025: a shift from the gray zone

Tajikistan is taking steps to regulate crypto by 2025, moving from a cautious approach to formalizing the digital asset sector.

Here’s what’s happening

• Currently, crypto exists in a legal gray area, with no outright ban but no official recognition either.
• The government is developing a licensing system for crypto businesses, suggesting a move towards formal regulation.
• While crypto isn’t illegal, it can’t be used for payments or salaries due to its perceived risks.
• Tajikistan is also exploring a digital somoni (CBDC), indicating interest in sovereign digital currency options.
• Despite official barriers, peer-to-peer crypto trading continues informally, showing public interest in digital assets.

Crypto in Tajikistan: a cautious approach

For a while now, cryptocurrency in Tajikistan has been in a weird spot. There’s no official ban, but it’s not exactly legal either. The National Bank of Tajikistan has always pointed out the risks, like financial instability and illegal activities. But, they haven’t stopped people from using it. This shows the government is trying to balance the risks with the growing importance of tech.

The Ministry of Digital Technology is working on a licensing system for crypto businesses. This means the government is thinking about making the crypto world official, which could bring some clarity to the market. Right now, the lack of clear rules makes things uncertain for businesses. The government is carefully looking at the pros and cons of crypto, which could lead to formal regulations soon.

A history of crypto regulation

Tajikistan’s view on crypto has changed over time. Back in 2018, the National Bank of Tajikistan warned about the risks but didn’t ban it. In 2021, the government looked into blockchain tech while still restricting crypto payments. By 2023, the Ministry of Digital Technology started writing licensing rules for crypto businesses. They’re also talking about a possible Central Bank Digital Currency (CBDC), with crypto remaining in a legal gray area until 2025. This shows the government is being careful, balancing innovation with financial stability.

The legal landscape

Cryptocurrencies aren’t illegal in Tajikistan, but they’re not considered legal tender either. The government doesn’t allow them to be used for payments or salaries because they see them as high-risk. The National Bank of Tajikistan keeps an eye on financial stability risks, while the Ministry of Digital Technology is working on crypto licensing rules. The Financial Monitoring Department makes sure everyone follows Anti-Money Laundering (AML) and Counter-Terrorism Financing (CFT) rules, treating crypto as a possible tool for illegal activities. Exchanges and businesses might face scrutiny under existing financial crime laws.

Moving towards regulation

The government is taking steps to regulate crypto activities, but with financial oversight. These policies show a cautious approach to digital assets. The Ministry of Digital Technology is creating a licensing system for crypto firms, which might soon need approval to operate legally, with a focus on AML compliance. Right now, crypto is banned for payments, and there are no plans for a state-backed crypto exchange. These regulations aim to balance tech innovation with financial security.

Blockchain vs. crypto

Cryptocurrencies present a challenge in Tajikistan. The government is exploring blockchain tech for public systems but is very careful about private cryptocurrencies. The National Bank of Tajikistan is researching a digital somoni (CBDC), showing interest in sovereign digital currency options. Government agencies are experimenting with blockchain to make public systems more transparent but are careful not to endorse decentralized cryptocurrencies. Even though crypto payments are restricted, peer-to-peer trading is still popular, showing the public’s interest in digital assets.

Challenges in the crypto sector

Tajikistan’s crypto sector faces several challenges due to the changing regulatory landscape. The lack of clear legal definitions for crypto, mining, and DeFi creates uncertainty for businesses and investors. Banks are hesitant to handle crypto-related transactions, leaving legitimate operators without banking services. The lack of oversight has allowed shady schemes and unregulated platforms to thrive, putting investors at risk. Limited public knowledge about crypto also leads to poor financial decisions, hindering the development of a secure and transparent digital asset ecosystem.

The future of crypto in Tajikistan

The future of crypto in Tajikistan depends on the approaches taken by regulators. A licensing framework for crypto businesses is expected by 2025-2026, along with stricter AML enforcement. Tajikistan might also test a digital somoni before fully regulating private crypto. The market is showing steady growth, with projections indicating continued expansion despite current restrictions. Future moves like a CBDC or formal crypto laws could redefine Tajikistan’s digital asset scene, providing clarity and stability for market players.