Turkmenistan’s position on digital assets has changed drastically, as it has decided to legalize cryptocurrency mining and exchanges under new rules designed to extract financial gains from the industry while strengthening government control.
Licensing Crypto Mining in an Energy-Rich State
According to Al Jazeera, under the new regime, entities that want to mine crypto must obtain state licenses, register as legal entities within Turkmenistan, and connect their operations to officially approved energy providers. Authorities set conditions on hardware sourcing, data‑center locations, and reporting obligations, including disclosure of power usage and mined asset volumes.
The framework distinguishes between industrial‑scale mining farms and smaller operations, but it applies clear rules to both that ban unregistered activity on residential or subsidized grids.
Officials frame the move as a way to monetize excess electricity from gas‑fired plants while preventing “shadow mining” that can destabilize infrastructure and bypass tax channels.
Exchanges Come Under Local Oversight
Alongside mining, Turkmenistan now recognizes crypto exchanges that register locally and comply with financial‑monitoring standards, including know‑your‑customer checks, anti‑money‑laundering controls, and transaction reporting.
Only crypto exchanges with domestic legal presence and partnerships with local banks can obtain authorization, which keeps routing and settlement inside the state’s regulatory perimeter.
The rules allow residents to trade approved digital assets, but they place strict limits on leverage, custodial practices, and cross‑border flows.
Supervisors retain the power to suspend platforms that violate capital, security, or disclosure requirements, and they reserve the right to define which assets qualify for listing under risk‑based criteria.
Regional Context
Turkmenistan’s move is in line with regional precedents in Kazakhstan and Uzbekistan, where governments attempted to regulate cryptocurrency mining while suppressing unlicensed exchanges and informal farms.
The country aims to attract international investment in data-center infrastructure and to establish itself as a regulated mining hub that uses locally generated energy.
There are still unanswered questions, including how easily residents may transfer money between domestic and international platforms and whether the government would accept currencies that prioritize privacy or resistance to censorship.
For the time being, the legalization sends a clear message: Turkmenistan now views cryptocurrency as a sector that the government plans to tax, license, and integrate into its strictly regulated economic model, rather than merely as a threat to capital restrictions.
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