Uzbekistan to Permit Crypto Mining Under Strict Conditions

The government of Uzbekistan has once again unveiled its bitter-sweet approach to Bitcoin (BTC) mining activities in the country with a new set of guidelines designed to govern the ecosystem.

Uzbekistan’s National Agency of Prospective Projects (NAPP) has published a set of demands from crypto miners in the nation through the “Guidelines on the registration of the crypto assets mining,” a policy document that takes the form of a normative act.

Per the demands, all miners operating in Uzbekistan are expected to be powered by electric energy derived solely from solar-powered plants. The detail of the new guidelines;

“Mining is being carried out only by the legal entity with the use of electric energy, provided by a solar photovoltaic power plant.”

The NAPP says the mining of cryptocurrencies by an unlicensed entity is highly prohibited and while the confirmation of the critical aspects of the new law has just been finalized, approval is slated for July 9th of this year.

Besides the use of a solar-powered plant, the government mandates that anyone who must mine must also be the owner of the solar power plant, a requirement that forbids renting hosting spaces out to prospective miners. 

Crypto miners operating in Uzbekistan must be registered according to a small list of requirements that must be met in full prior to the granting of the license. When finally granted, the license will be valid for a period of just one year.

Uzbekistan Offers Tax Freedom to Miners

The government of Uzbekistan is not all stringent on the crypto mining industry, infact, the mined digital currencies will be tax-free according to the new NAPP guidelines.

Current and prospective miners, however, need to bear in mind that they will have to compensate for this allowance with complimentary cost tariffs on consumed energy. A caveat was also placed on the avenues to trade the mined produce, and based on this, the NAPP mandates that miners must trade the digital currencies on a licenses trading platform operating in the country.

While many industry observers may consider this terms and conditions to be too stringent, it can be generally agreed that it offer a better allowance compared to the outright ban that was issued by China, a move that is also under consideration from Russian regulators. EU advocates have also frowned at the use of clean energy for Bitcoin mining, a move that sets Uzbekistan apart.