Turkmenistan Allows Crypto Mining and Exchanges Under Strict State Controls

Highlights:

• Turkmenistan has permitted crypto mining under a state-licensed system with central bank oversight.
• The new law permits mining and exchanges, but blocks the use of crypto for payments or as legal tender.
• Mining may grow slowly due to strict controls and limited internet access.

Turkmenistan has put its long-awaited virtual asset legislation into force as of January 1. The law followed parliamentary approval in November and presidential assent later in 2025. It proposes a legal framework for digital assets in an extremely regulated economic system. Authorities framed the reform as administration modernization, rather than monetary reform.

The new framework subjects digital assets to civil law and formal state oversight. Authorities designed the structure to limit financial risk and maintain institutional control. Therefore, all activity must follow defined legal and administrative rules.

Legal Framework Takes Effect With Firm Oversight and Licensing Rules

The Law on Virtual Assets establishes clear boundaries for digital asset activity. It specifies the way participants are supposed to register and work in the system. The regulators put the central bank at the center of supervision and licensing. Therefore, entry, compliance, and continuous monitoring are under the control of the authorities. This approach reflects Turkmenistan’s preference for centralized economic governance.

Officials confirmed that the framework applies equally to domestic and foreign users. However, every participant must complete registration and licensing procedures. The legislation defines compliance responsibilities that are to be followed by any authorized operator strictly. These obligations comprise reporting and compliance with financial monitoring regulations.

The law also confirms the legal position of digital assets. It states that these assets do not qualify as currency, securities, or payment instruments. Therefore, individuals cannot use them for everyday transactions.

Turkmenistan Allows Crypto Mining Within a Licensed Regulatory Model

The legislation permits mining operations under a strictly regulated licensing regime. Residents and non-residents are allowed to participate, provided they are registered by the authorities. The central bank will monitor approvals and continuous compliance inspections. As such, only the vetted operators will be allowed in the sector.

Mining pools can operate under the new rules. However, operators must follow technical and reporting standards set by regulators. Authorities require participants to align operations with national infrastructure rules. There is internet monitoring throughout the country. As a result, large-scale activity faces practical constraints.

Exchange operators must obtain licenses and implement customer verification procedures. The law mandates strong identity checks and transaction monitoring. Operators must also meet cold storage and asset protection standards. These rules aim to limit financial misuse and systemic exposure. Although legalized, participants are limited by the authorities in their use of digital assets. The framework still does not allow payments. Interaction between exchanges and the rest of the financial system is also restricted by regulators.

Energy Diversification Drives Cautious Digital Asset Adoption

Turkmenistan is a country that depends on the exports of natural gas, and China is one of its largest purchasers. Policymakers are in search of alternative uses of excess energy capacity. Mining provides a possible option without shifting export structures. Officials see this as a technical option, not a revenue transformation. Energy efficiency remains a central consideration.

The policy change is consistent with broader regulatory adjustments in Europe. Russia has also increased mining regulations with a new bill. Moscow now imposes tax on mining and restricts production in the power-intensive areas. In the meantime, the United States continues to be the main destination of major industrial mining companies. In China, Bitcoin mining has surged 14% of the global Bitcoin mining market despite the activity being banned in 2021.