Uzbekistan opens up to bitcoin mining, but there’s a catch

Uzbekistan opens up to bitcoin mining, but there’s a catch

The National Agency for Prospective Projects (NAPP) of Uzbekistan announced its demands towards crypto mining operators. It would only allow companies that use solar energy to mine bitcoin (BTC) or other cryptocurrencies..

The normative act on the government page, dated June 24, describes the confirmation of the “Guidelines on the registration of mining of crypto assets”, and sets the end date as July 9. The second article of the document offers uncompromising wording:

“Mining will be carried out only by a legal entity with the use of electrical energy provided by a photovoltaic solar power plant.”

As an added complication, miners must own the solar photovoltaic power plant they will use for power.

The executive order also requires any mining operator to obtain a certificate and register with the national registry of cryptocurrency mining companies. This procedure requires a short list of documents, and should take no more than 20 days from submission to final decision by the licensing body. The certificates would be valid for one year after registration.

Coins generated by mining activities will be tax free, although the mining farms will have to face special tariffs on the energy consumed established by the government of Uzbekistan. Nevertheless, trading operations with the mined assets would have to be carried out only on exchange platforms registered in Uzbekistan. Anonymous cryptocurrency mining would be prohibited.

In April 2022, the newly restructured NAPP became the exclusive crypto regulator of Uzbekistan with the mission of adopting a special crypto-regulation regime in the country. This move came in a row of initiatives launched by the President of Uzbekistan, Shavkat Mirziyoyev, to provide the regulatory framework for cryptocurrencies. In September 2018, Mirziyoyev signed a law that prohibited local companies from launching their crypto exchanges in Uzbekistan.. The law only offered legal status to crypto exchanges established by foreign legal entities.

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