Uzbekistan’s cryptocurrency landscape is undergoing significant changes, with the country’s primary crypto market supervisor, the National Agency for Perspective Projects (NAPP), unveiling a comprehensive framework for licensing cryptocurrency mining operations. This groundbreaking development comes with several notable provisions aimed at regulating the industry.
Restrictions on Cryptocurrency mining, legal entities only
Under the new law, cryptocurrency mining operations in Uzbekistan will be limited exclusively to legal entities. Individual miners will no longer be permitted to engage in mining activities.
One of the most remarkable aspects of the NAPP’s directive is the requirement for mining firms to utilize solar power for cryptocurrency mining. However, exceptions allowing the use of Uzbekistan’s unified power system are specified in the legislation, though the document doesn’t detail these cases.
Mining companies are now obliged to establish dedicated rooms for installing mining equipment, ensuring a controlled environment for mining operations. Additionally, mining must occur exclusively from the registered address of the company.
Global Bitcoin mining challenges
In a report by Todayq News on October 3, 2023, it was revealed that Bitcoin mining companies worldwide experienced losses due to rising operational expenses and market volatility. In Kazakhstan, the third-largest Bitcoin mining market, major mining firms raised concerns about high energy prices in an open letter addressed to President Kassym-Jomart Tokayev.
Cryptocurrency mining firms are mandated to make timely and full payments of mining fees as determined by the regulatory authorities.
The NAPP has explicitly prohibited the mining of “anonymous” cryptocurrencies, specifically referring to privacy-focused digital assets like Monero. These cryptocurrencies are designed to obscure network transactions and will no longer be permitted for mining in Uzbekistan.
Calls for legal compliance
The NAPP also emphasized the necessity of obtaining the appropriate permits and licenses for all mining operations and services. They also urged citizens to operate within the legal framework and abstain from unauthorized cryptocurrency-related activities.
Uzbekistan’s cryptocurrency mining regulations remain uncertain due to multiple decrees, with the government consistently banning individual miners from engaging in cryptocurrency activities. President Shavkat Mirziyoyev reiterated this ban in April 2022.
However, the evolving regulatory landscape suggests the country’s interest in establishing a structured and controlled environment for cryptocurrency mining, indicating a growing interest in the sector. As these regulations continue to evolve, stakeholders and cryptocurrency enthusiasts will closely monitor their impact on the industry’s development in the region.