Recently, Uzbekistan started to be another one of the countries leading the discussions for how to regulate Security Token Offerings (STOs). The central Asian nation is making an effort to become more crypto friendly since last year and it looks like the efforts are starting to pay off.
While the country took its time to be able to start the conversation about STOs, the former Soviet country with a population of only 32.5 million people has decided to level up its economy by embracing the blockchain, which is always a good idea.
Efforts are more strong since September 2018, when crypto exchanges started to be regulated in the country after friendly legislation has been passed. The president of the country, Shavkat Mirziyoyev, has also created a digital trust at the time which would be used to help blockchain startups.
The Regulation For Security Token Offerings
Now, the Digital Trust initiative is working hard to bring security token offerings to the country. While the idea is still at a very early stage and the framework is just starting to be made real, the investment director of the state fund, Bobir Akilkhanov, has told the media that they are working on the laws already and that they do not want to rush it or to make any mistakes.
The decision to back STOs, which are deemed as proper security tokens instead of Initial Coin Offerings (ICOs), which often claimed to be utility tokens, is because the group sees ICOs as “hype tools for investors” and STOs to be more legitimate.
There is some logic to this claim. While not all ICOs were only speculative gambles and some teams were very dedicated to their projects, ICOs got bad fame. More than half of them were total busts of scams and people do not forget that easily.
While the hype for crypto projects is down now, Kazakhstan, a neighbor of Uzbekistan, has already followed this path with a degree of success, so this is certainly not a bad idea or one to appear too late.
Only time will tell whether Uzbekistan will actually achieve its goal of creating a crypto friendly country and whether this will help the economy of the small country or not, but it looks like the country is on the right track.