Crossroads Asia | Security | Central Asia

From Data Localization to Digital Openness: Uzbekistan’s Regulatory Shift 

Uzbekistan courts tech companies to boost its economy by easing its once infamous data localization law.

Head of the Uzbek Presidential Administration Saida Mirziyoyeva met recently with meeting with Vice President of Google Karan Bhatia for discussions on launching YouTube monetization in Uzbekistan.

During a visit to New York in late September, the head of Uzbekistan’s presidential administration, Saida Mirziyoyeva, met with Google Vice President Karan Bhatia to discuss the possibility of launching YouTube monetization in Uzbekistan. Uzbekistan has been actively seeking to expand its partnership with global digital companies in line with the country’s growing digital economy. Tashkent even re-wrote the laws that once made it difficult for international technology platforms to operate in the country. 

The 2021 amendment to Uzbekistan’s Law on Personal Data imposed a restriction on the storage and processing of Uzbek citizens’ data abroad, raising the question of how domestic regulation could accommodate services operating across borders. PayPal, Stripe, Netflix, Spotify, and Amazon Web Services refused to enter the Uzbek market while Apple Pay, Google Pay, and Google Cloud limited their functionality.

However, it soon became clear that the regulations introduced to protect personal data got in the way of generating money. Last year, the Center for Economic Research and Reforms (CERR) calculated Uzbekistan’s annual losses without YouTube monetization alone as $50 million annually. Mirziyoyeva’s efforts reflect the country’s wider attempt to re-attract global tech-companies by revising local regulations.  

The Economic Cost of Data Sovereignty 

In May 2021, Uzkomnazorat, Uzbekistan’s digital and telecommunications regulator, announced that VKontakte (Mail.ru Group), Twitter (Twitter Inc.), and WeChat (Tencent Inc.) were processing Uzbek citizens’ data abroad in violation of the data protection law. On July 2 of that year, Uzkomnazorat blocked access to those social media sites over alleged non-compliance with data-localization requirements.

“If the internet companies are planning to work in Uzbekistan, they have to observe the legislation of Uzbekistan,” noted Temur Akhmedov, then with the Institute for Strategic and Interregional Studies under the President of the Republic of Uzbekistan. In August 2022, just over a year later, Uzkomnazorat walked its enforcement decision back, removing Twitter, VKontakte, and WeChat from its “register of violators of the rights of personal data subjects.” The platforms were unblocked with no explanation given for the change.    

By 2024, the data protection law’s cost for Uzbekistan’s economy became more apparent. As the government sought to integrate international payment systems like PayPal, AliPay, UniPay, Apple Pay, and Google Pay into the country’s banking system to attract more tourists, requirements to store citizens’ personal data locally emerged as a major obstacle. 

During the negotiations with Apple and Google, the Central Bank of Uzbekistan noted that “in order to connect Visa and Mastercard cards issued by Uzbek banks to the Apple Pay and Google Pay systems, it is necessary to review some requirements of the current legislative documents, in particular, the Law of Uzbekistan ‘On Personal Data.’” 

TBC Bank Group PLC’s representative Oliver Hughes, during a December 2024 presidential meeting with entrepreneurs, suggested allowing banks to store their data in the cloud both in Uzbekistan and offshore jurisdictions. 

“We are talking about the personal data of citizens,” President Shavkat Mirziyoyev said. “This is a very serious matter. We have no right to make mistakes.” He emphasized the need for a carefully considered solution. 

By 2025, the debate on data localization increasingly focused on its economic costs. In July 2025, Kotib AI Research, an AI company, estimated the potential cost of the localization law  to Uzbekistan’s economy at $3.2 to $4.5 billion a year. The absence of PayPal alone had cost the country at least $1.8 billion in revenue over the previous five years. Uzbekistan is the only country in Central Asia without access to the service. PayPal’s global payment system is built on a single data infrastructure, and it does not keep each country’s data separate. It is reportedly technically inconsistent to store only Uzbek users’ data on a separate local server, as a single server cannot isolate the........

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