Uzbekistan legalizes mining of cryptocurrencies on solar electricity

Against the backdrop of problems with electricity in the region, the authorities of Uzbekistan are motivating mining companies to use solar power plants (SPPs) for mining cryptocurrencies.

Government of the country licensed mining using solar power as a source of electricity. The authorities have offered mining companies renewable electricity at special rates as an alternative. However, during periods of peak electricity consumption, officials warn, additional fees may be levied.

Some cryptocurrencies, including bitcoin, are created through a process called proof-of-work, the Uzbek government explains, and it requires computers to “mine the currency by solving complex puzzles.” To power such computers, a large amount of electricity is required, which is why the issue of the load on the power grid is so acute in the country, officials lament.

In parallel, the country’s leadership exempted all cryptocurrency operations of local and foreign companies from income tax. Currently, miners do not need to obtain a special license to operate, but they must be registered with the newly created National Agency of Uzbekistan for Advanced Projects.

Uzbekistan legalized cryptocurrency trading in 2018, but only on the internal crypto exchange. At the same time, a number of renewable energy projects, mainly solar and wind power plants, were launched in this Central Asian country.

Recently, the President of Uzbekistan issued a decree on the regulation of the cryptocurrency market, as well as the introduction of a fixed personal income tax rate for industry participants and mandatory contributions to state trust funds. In 2021, the National Agency for Project Management under the President proposed to amend the legislation on the legalization of trade in cryptocurrencies. In the same year, Uzbekistan began to explore the possibility of creating a regulatory sandbox for the development of Uzbekistan Blockchain Valley digital technologies with the participation of the agency.

Source: Bits

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