Home Crypto Bitcoin mining restricted to legal entities in Uzbekistan: Official

Bitcoin mining restricted to legal entities in Uzbekistan: Official

by Janine Lindsey

Uzbekistan’s cryptocurrency mining industry is undergoing significant changes as the country’s crypto market supervisor takes steps to regulate and legitimize the sector. The National Agency for Perspective Projects (NAPP) has approved a framework for licensing crypto mining operations, allowing only legal entities to engage in such activities.

One of the key provisions in the NAPP’s decree is the exclusive use of solar power for cryptocurrency mining. This move aligns with global efforts to promote sustainable practices in the crypto industry and reduce its environmental impact. However, the document does mention the possibility of using the unified power system of Uzbekistan in certain cases, although it does not specify what those cases are.

In addition to the energy requirement, the NAPP has imposed several other regulations on crypto mining firms. This includes the establishment of a dedicated room for installing mining equipment and the mining of cryptocurrencies only at the registered address. The rules also mandate timely and full payment of mining fees set by regulators.

Furthermore, the NAPP has banned the mining of anonymous cryptocurrencies. This refers to privacy-focused digital currencies like Monero (XMR), which allow users to obfuscate network transactions. The authority insists on transparency and accountability in the mining sector, aiming to prevent illicit activities and money laundering.

It’s worth noting that this latest regulatory framework might not be the final decree, as Uzbekistan has issued multiple similar documents in recent years. The government has repeatedly prohibited individual miners from operating in the country, with President Shavkat Mirziyoyev signing a decree in April 2022 reiterating the ban on using cryptocurrencies as a means of payment.

The NAPP’s actions show a concerted effort by Uzbekistan to establish a regulated and controlled crypto mining industry. By licensing operations and setting clear guidelines, the country aims to protect investors, prevent illegal activities, and ensure that the sector aligns with legal and environmental standards.

While some may argue that excessive regulation hampers innovation and stifles the potential development of the crypto industry, others view these measures as necessary steps to establish a secure and trustworthy ecosystem. As the crypto market continues to evolve and mature, it is expected that more countries will introduce regulatory frameworks to strike a balance between innovation and investor protection.

It remains to be seen how the Uzbekistan government and the NAPP will further develop and enforce these regulations. As the crypto industry continues to expand globally, it is crucial for governments to adapt and create frameworks that foster innovation while also safeguarding the interests of their citizens and the overall economy.

(Note: This news article is a summary of the original article published on Cointelegraph)

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