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Uzbekistan Looks to Lure Crypto Exchanges With New Tax Benefits

The Uzbekistan government is welcoming cryptocurrency exchanges to set up shop within the country.

An order issued by president Shavkat Mirziyoev on September 2 gives foreign exchanges a number of benefits to begin operating in the country. The document states that cryptocurrency-related income will not be taxed, licensed exchanges running operations with cryptocurrencies and foreign fiat currencies are not subject to existing foreign currency regulations and crypto exchanges are not subject to the country’s securities and exchanges regulations.

However, foreign entities can only get a license for a cryptocurrency exchange after they open a subsidiary in Uzbekistan.

Further, the terms for getting such a license may be restrictive: an exchange must have an authorized capital of no less than 30,000 times the average minimum salary, which amounts to roughly $700,000; servers must be located in Uzbekistan; exchanges must utilize anti-money laundering procedures for users and they must store users’ transaction and personal data for at least five years.

There are also benefits for miners: the document orders federal and local government officials to provide industrial miners using more than 100 kWh of power with land without requiring an auction (which is normally required to acquire land) on “specially designated territories.”

The move comes months after the government announced a goal to develop new regulations for cryptocurrencies in the country. In February, the government also announced its intention to create a state-funded innovation center for exploring the opportunities of blockchain in the state capital of Tashkent, the news agency Fergana.ru reported.

Editor’s note: Statements in this article have been translated from Russian.

Uzbekistan map image via Shutterstock

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Chinese City Is Using Blockchain to Track Convicts on Parole

Convicts on parole in the southern Chinese city of Zhongshan can now find themselves being tracked over a blockchain network.

The justice department of Zhongshan says it has launched a blockchain-based system that can monitor the movements of ex-prisoners to improve the quality of so-called “community correction,” a local media source reported on Thursday.

The technology has apparently been deployed across various community service centers where parolees are required to check in and complete daily duties.

The department said it developed and applied the blockchain system in an effort to provide up-to-date data on each convict’s movements around the clock.

Since convicts’ data is updated in a distributed fashion, community correction staff and relevant law enforcement agencies who are given access to the network are able to know a convict’s whereabouts at any time, and thus can take necessary measures if one is breaking from the required routine.

The justice department claimed that the technology is able to reduce the manpower burden that is traditionally required to physically follow parolees when ensuring they are obeying laws and performing community service.

The Zhongshan implementation is the latest use case in which blockchain is being adopted in the legal system in China.

As CoinDesk previously reported, an internet court in the city of Hangzhou has already recognized the nascent technology as an authorized way for evidence deposition.

The major city of  Shenzhen is also turning to blockchain in the fight against tax evasion, a move made in partnership with internet giant Tencent.

City image via Shutterstock

The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.

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PBoC-Backed Blockchain Trade Finance Platform Enters Test Phase

A blockchain trade finance platform spearheaded by China’s central bank has entered the testing phase ahead of an official roll-out.

According to a report from 21st Century Business Herald on Tuesday, the first phase of the so-called Bay Area Trade Finance Blockchain Platform is already deployed across financial institutions in the southern city of Shenzhen and is currently undergoing final trials.

The Bay Area in Southern China is an economic development zone consisting of major cities along the Pearl River and the special administrative regions of Hong Kong and Macau.

The trade finance project was jointly pushed through and coordinated by the Digital Currency Research Lab of the People’s Bank of China and the central bank’s Shenzhen branch, the report indicates. Major commercial banks in the country, including the Bank of China, the Bank of Communications, China Merchants Bank, Ping’An Bank and Standard Chartered, also participated and assisted with development.

The platform is aimed to boost the efficiency of interbank transactions and to help small- and medium-sized businesses access a wider range of financing tools, such as asset-backed securities, as data can be easily shared across participants via a distributed network

Further, greater levels of transparency of transactions and information shared on the blockchain is expected to give local regulators more granular oversight for improved risk control and fraud prevention, the report added.

The trade finance effort comes as Hong Kong’s de facto central bank is also deploying a blockchain-based trade finance platform, with participation from a group of financial institutions in the Chinese special administrative region.

As CoinDesk has previously reported, the Hong Kong Monetary Authority was set to roll out the project by September – one technologically developed Ping’An Insurance, the entity that owns Ping’An Bank.

Shenzhen skyscrapers image via Shutterstock

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Japanese Police to Fund Crypto Criminal Tracking Tool

Japan’s National Police Agency (NPA) is to fund development of new software to help track individuals behind illicit crypto transactions.

According to a news report from NHK on Thursday, the NPA will budget 35 million yen ($315,000) for 2019 to fund creation of the product – outsourcing technological development of the software to the private sector.

The NPA said the software will track the flow of blockchain transactions flagged as suspicious and “visualize and locate” the individuals sending or receiving the cryptocurrency.

The effort apparently comes in response to the increasing number of suspected criminal cases in Japan that involve cryptocurrency. Given the anonymity of blockchain transactions, police forces in the country are facing difficulties when conducting further investigations.

Early this year, the NPA disclosed it had received 669 reports of suspected money laundering from Japanese crypto exchanges in just eight months of 2017, as reported by CoinDesk.

Further, according to an annual reported revealed by the agency in March, hackers stole at least $6.2 million-worth of cryptocurrencies from Japanese users’ exchange and wallet accounts in 2017.

The cryptocurrency industry in Japan also took a hit in January after the Coincheck exchange reported a $520 million hack, which prompted calls from regulators to implement better crypto anti-money laundering and security measures.

Japan police car image via Shutterstock

The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.

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Korea's Jeju Island Appeals to President in Push for ICO Hub Status

The governor of South Korea’s Jeju island is maintaining his push to turn the autonomous region into a blockchain and initial coin offering (ICO) free zone.

On Thursday, South Korean provincial governors hosted a meeting with President Moon Jae-in to discuss job creation in the country. In his remarks, Governor Won Hee-ryong of the Jeju province proposed to the president that the island should be designated as a special hub for blockchain to allow companies conduct ICOs, as CoinDesk Korea reports.

Won argued that, by doing so, the region would create at least 1,600 more jobs by attracting both domestic and foreign companies wishing to launch ICOs – especially those whose home jurisdictions prohibit token sale fundraising, such as China.

He said:

“If Jeju Island is designated as a blockchain special zone, international standards and regulations on cryptocurrency should be created to ensure that blockchain and crypto companies that are promoting sound businesses both domestically and abroad can conduct businesses in the province.”

Established as a self-governing region in the early 2000s, Jeju island enjoys a high level of administrative autonomy, such as adopting a visa-free policy in a bid to boost the local economy and technological development.

Won’s proposal follows his previous address on the topic during a meeting with high-level financial regulators and lawmakers in the country in mid-August.

It also comes as the cryptocurrency industry in South Korea is seeing an increasing number of efforts to alleviate regulatory obstacles to ICOs following an outright ban announced by the country’s financial watchdog last year.

On Wednesday, Jung Byung-kuka, a South Korean lawmaker hosted an industry forum attended by lawyers and regulators to discuss how to form guidelines that would allow initial coin offerings (ICOs), also as reported by CoinDesk Korea.

Additionally, the National Assembly, South Korea’s legislative arm, officially proposed legislation in May, that would allow ICOs to be conducted as long as investor protections included.

Governor Won image via Jeon Han/Wikipedia

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Chinese Tech Hub Follows Beijing With Ban on Crypto Promotion

A special economic zone in China’s Guangzhou city is following the lead of Beijing’s financial district in banning activities that promote cryptocurrencies.

According to a news report from National Business Daily on Wednesday, the finance department of the Guangzhou Development District issued a notice to local businesses on Aug. 24, prohibiting them from hosting any crypto-related promotions or events.

The move comes just days after the government authority of Beijing’s Chaoyang district issued a similar missive to shopping malls, hotels, restaurants and official buildings, as CoinDesk previously reported.

Citing a similar reason to that offered in Beijing, the Guangzhou agency said the goal of the restriction is to “strengthen the position of Chinese yuan as the legal currency in China and to stabilize the country’s financial system.”

Established by the State Council in the 1980s as one of the country’s first special economic zones, the district was set out to be the hub for boosting economic and technological development in southern China.

While Guangzhou seeks to clamp down further on cryptocurrency, the government of Guangdong province, in which the city is situated, is taking the opposite stance.

Guangdong province published a notice on Tuesday, issued Aug. 14, that ordered municipal and county level governments to speed up the process of rolling out policies to support blockchain startups and accelerate the adoption of applications related to the tech.

China’s State Council, too, demanded that local authorities speed up blockchain technology development in May.

Guangzhou image via Shutterstock

The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.