Uzbekistan open to crypto mining but the govt has has set some limitations

  • Miners operating in Uzbekistan will have to set up their own solar plants to power their crypto mining operations.
  • Uzbekistan will also offer some key taxation benefits against setting up green energy-based mining operations.

The Central Asian Nation of Uzbekistan is ready to allow crypto mining operations in its country. The National Agency of Prospective Projects (NAPP) in Uzbekistan also disclosed its demand from the crypto mining operators.

Uzbekistan said that it would allow companies to mine digital assets provided they use solar energy for the mining operations. The normative act on the government website, dated June 24, describes the confirmation of “Guidelines on the registration of the crypto assets mining”. The normative act also sets the finalization date for the guidelines as of July 9. Another article in the document offers uncompromising wording. It notes:

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

As an additional implication, the miners have to own the solar photovoltaic power plant which will provide energy for their mining operations. Similarly, the executive order requires the mining operator to obtain a certificate and register as part of Uzbekistan’s national registry of crypto mining companies.

Read More: Uzbekistan legalizes crypto mining using solar energy

The procedure requires a list of a few documents. However, it should not require more than 20 days from submitting to the licensing body’s final decision. After the registration process, the certificate remains valid for a year.

Tax benefits to crypto miners

The Uzbekistan government has announced major tax benefits for miners running their crypto mining operations on solar energy. The cryptocurrencies generated from such mining activities will be spared taxation. The country will exempt all domestic and foreign countries from the income tax.

However, the mining farms will still face special tariffs on the consumed energy set by the Uzbekistan government. The government will also ban the mining of anonymous cryptocurrencies. Although the government hasn’t come clear about it, these could be private cryptocurrencies such as Monero (XMR).

Uzbekistan embraced the cryptocurrency market back in 2018 by legalizing trading only through a domestic local exchange. Thus, the trading for the mined assets will happen only through the registered crypto trading platforms in Uzbekistan.

Earlier in April 2022, the restructured NAPP became Uzbekistan’s go-to regulator for crypto. It is responsible for setting up a special regulatory regime in the country. Uzbekistan President Shavkat Mirziyoyev launched a range of initiatives to bring a crypto regulatory framework to the country.

The extreme electricity power required for crypto mining operations has been a key concern for countries. For this reason, China announced a complete ban on Bitcoin mining last year. Later Kazakhstan also cracked down on mining operations that strained the country’s power grid. After the China ban, Kazakhstan has emerged as the second biggest country for crypto mining after the United States.

Related: Kazakhstan shuts down over 100 illegal crypto mining farms

Credit: Source link

Leave A Reply

Your email address will not be published.