Uzbekistan is the latest country to set its sights on the cryptocurrency industry – albeit a little bit late in the game.

With a population of 32.5 million, the former Soviet state has taken several major steps toward becoming more crypto-friendly, starting with the legalization of cryptocurrency exchanges in September of 2018. The same month, President Shavkat Mirziyoyev created Digital Trust, a fund formed with the expressed purpose to invest in blockchain startups, as well as research and development.

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Now, Digital Trust is working to bring security token offerings (STOs) to the central Asian nation.

The Initiative is In Its Exploratory Phase

At this point, the initiative is still in the exploratory stage. “We are looking very carefully at STOs and just starting to build the framework for it,” said Bobir Akilkhanov, investment director at Digital Trust, in a Forbes report. “We are working on the laws to build the market. We don’t want to hurry through it and make all these mistakes and have something that is not useful.”

Akilkhanov added that the decision to explore STOs and not ICOs is because – correctly or incorrectly – the latter was “a hype tool for investors, with no assets to back up those coins.”

“STOs are more of a legitimate investment because you can tokenize your assets,” he explained.

Akilkhanov did not disclose the number of assets under the fund’s control, although it is known that the fund does not currently possess digital assets of any kind. However, at least one of the fund’s investments is known – Delta City, a “smart-city” real estate project in Tashkent.

Central Asian Countries Bid on Crypto

Although the hype around the cryptocurrency and blockchain industries has deflated quite a bit over the past year, Uzbekistan could still stand to profit off of making itself into a blockchain-friendly jurisdiction.

Finance Magnates reported in July of 2017 that neighboring Kazakhstan’s Astana International Financial Center announced the creation of a working group to develop an ecosystem to enable blockchain solutions for the CIS (Commonwealth of Independent States).

Then, in October of 2017, Astana International Financial Center and EXANTE announced an agreement on the development of a platform that would serve as the foundation of a new national digital asset secured by fiat.

However, the fiat-backed asset still has not come to fruition, and reports that the Kazakh Central Bank was considering banning cryptocurrencies emerged in April of 2018.