Crypto and Tajikistan: RECONGIZED AND OUTLAWED?

Two years ago we wrote in our article (https://aaa.tj/articles/cryptocurrency-and-tajikistan-last-and-least-or-the-majority) that on the scale of global crypto adoption and regulation Tajikistan was among the last and the least if compared to its closer or immediate neighbors. Our legal analysis at the time showed, at the same time, that, strictly speaking, crypto was neither legally banned nor legally restricted in Tajikistan.

In this update we take a snapshot of what happened since then. The update was prompted by the Presidential Decree No 798 of 27 March 2024, which approved a Regulations of the Agency for Innovation and Digital Technologies and the Special Regime Rules in the sphere of Innovation and Digital Assets. The Decree’s main focus was to open the door for pilot project involving digital transformation and innovation.

 

Regulation and Recognition

While the new regulations touch upon, and actually operate with, the term “crypto assets”, they still do not define it. Similarly, crypto mining remains to be undefined to date, too. The same applies to the definition of the “blockchain” altough on a few occasions reference was made to the "technology of a ditributed ledger". 

This is in contrast to some of neighboring jurisdictions, where, attempts have been taken to define some of the terms a few yers eralier (Kazakhstan, Kyrgyzstan and Uzbekistan).

At the same time, the Agency for Innovation and Digital Technologies is now entrusted with regulation of, including proposing new legislation for, the “circulation of digital assets including crypto-assets”. This is the first time that Tajik law calls crypto by its name using the word "crypto". On this basis, we have now a legal recognition of the possibility for the existence of crypto-assets in Tajikistan, although, as mentioned previously, this and related terms are not defined and this is likely to come soon.

Restrictions

While the Decree No 798, recognizes the legal possibility for the existence of the crypto assets in Tajikistan, it introduces certain restrictions. 

Thus, the Decree aims to promote digital assets transformation by allowing for special regulatory regimes for companies which introduce innovation and digitization during testing their project ideas (pilot projects).  It is in this context of this special regimes that the Decree makes it clear that any such projects promoting the use of crypto assets as the medium of payment will be prohibited. In other words, it is prohibited (a) to pay with crypto; and (b) to receive crypto as a remuneration for any service or good. Such tight interpretation still leaves issues of mining and other use of crypto in Tajikistan unanswered and unregulated, at least for the time being.

It is not utterly clear if the intention was to exclude any crypto-related projects from the ambit of the special regime or to prohibit them altogether. Given that the Agency for Innovation and Digital Technologies was granted power to regulate the crypto assets domain, crypto as such is not ultimately outlawed and the government, perhaps, prefers to retain its monopoly over such potential projects.  

What is crypto in legal terms?

Because cryptocurrency has in it a refence to the word “currency”, it is often called the currency. However, legally speaking, in Tajik law, it is not. There are two key terms with which Tajik law operates in this regard: “national currency” and “currency”. The former is Tajikistan Somoni, a legal tender in Tajikistan. The latter is defined as “national currency of a foreign state”. It now becomes obvious that crypto currency is not the currency in Tajikistan. Now, with the adoption of the Decree No 798, Tajikistan calls the crypto currency a “crypto asset”, the term which better reflects the nature of crypto.

Is crypto asset a digital money? As described previously, the message of the Decree No 798 essentially is that using crypto as a medium of exchange is prohibited in Tajikistan. So, crypto cannot be a legal tender, at least it cannot be contemplated as a payment medium within the framework of the projects which the government allows to be promoted.

If you wish to go deeper into the subject as is currently applied to Tajikistan, please refer here https://aaa.tj/articles/cryptocurrency-and-tajikistan-last-and-least-or-the-majority.