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Uzbekistan Allows Crypto-Mining Using Solar, Ends Taxes

The Central Asian state would also exempt all crypto operations by domestic and foreign companies from income tax, according to a presidential decree


Turakurgan thermal power plant
The Turakurgan thermal power plant in Uzbekistan's Namangan region. Only solar power can be used to mine cryptocurrencies, the government decreed. Photo: Uzbekenergo.

 

Uzbekistan – which legalised cryptocurrency trading in 2018 – said it would allow crypto-mining using solar power to conserve energy and reduce the sector’s controversial carbon footprint.

The Central Asian state would also exempt all crypto operations by domestic and foreign companies from income tax, according to a presidential decree published this week.

The Tashkent government wants crypto-mining entities to power their farms by installing their own solar panels.

Crypto-mining companies can be connected to the power grid if they pay double the regular price. However, during peak consumption periods, extra surcharges can be levied, according to the decree.

 

ALSO READ: Kazakhstan Unrest Slashes Crypto-Mining Operations

No licence is required for crypto-mining but the company must be registered by a newly formed Uzbek National Agency for Perspective Projects, the document said.

Some cryptocurrencies, including bitcoin, are created by a process called proof of work which requires computers to “mine” the currency by solving complex puzzles. Powering those computers involves large amounts of electricity.

The central Asian nation has also launched a series of renewable energy projects, mostly solar and wind power plants.

Neighbouring Kazakhstan, which became the world’s second-largest centre for crypto-mining after the US last year, has cracked down on mining after such operations strained its power grid dominated by ageing coal power plants.

 

  • Reuters, with additional editing by George Russell

 

 

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George Russell

George Russell is a freelance writer and editor based in Hong Kong who has lived in Asia since 1996. His work has been published in the Financial Times, The Wall Street Journal, Bloomberg, New York Post, Variety, Forbes and the South China Morning Post.

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