Uzbekistan Flag in Digital Currency

Uzbekistan publishes guidelines for registering block reward mining businesses

The National Agency for Prospective Projects (NAPP) of the federal republic of Uzbekistan, the sole digital currency regulator of the country, has published its guidelines for the registration of block reward mining operators. 

The guidelines were released on the government’s portal for discussing draft laws. It set out Uzbekistan’s definitions of digital currency terms, spelled out requirements and conditions for obtaining a block reward mining permit, and how the NAPP reached its decision to grant the permit.

Specifically, it dictates that registration certificates for block reward mining could only be issued to miners using solar energy to generate electricity. They are also not permitted to connect other block reward miners to their power source. 

“Mining is carried out exclusively by a legal entity using electricity produced by a solar photovoltaic station…; is subject to mandatory registration by the registration authority and is not a licensed activity,” the guidelines state. 

Connection to the local grid requires a separate registration with the Ministry of Energy and will attract payment of double the regular price for electricity. 

The law further states that mining digital currencies with anonymity features are prohibited. Setting up a mining operation at a location other than the one approved during registration is also illegal. A transaction reporting guideline is also to be kept with. 

Meanwhile, the law states that digital assets earned through mining in the country are not subject to taxation. However, they must be sold on digital currency exchanges registered in the country. 

The certificate miners will obtain by meeting the requirements will last for one year and is not transferable. The law entered into force on June 24, the day it was published.

Uzbekistan warming up to digital assets

The guidelines follow the presidential order signed in April by Uzbekistan’s President Shavkat Mirziyoyev, restructuring the NAPP and naming it the oversight body for the digital currency industry. 

The NAPP was formerly the National Agency for Project Management (NAPM) and had a track record of advocating for favorable digital currency regulations. The executive order also introduced the legalization of block reward mining with solar power. 

The president’s regime has long been championing initiatives to open the country to the digital assets industry. In 2018, the president legalized the trading of digital assets, although with the caveat that local firms cannot launch exchanges. Trades can only be carried out on offshore exchanges.

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