Uzbekistan has announced that it will allow firms to mine cryptos with solar energy and will also exempt crypto-related operations by both foreign and local companies from income tax, according to the country’s presidential decree released this week.
Tashkent’s administration wants miners to power their mining rigs and farms from solar panels. The decree also offered miners an alternative but an expensive one. To power mining rigs from the grid, mining companies have to pay double the normal price for electricity. Again, an additional surcharge will be levied to use power from the grid during the peak periods.
No License Required for Mining Companies in Uzbekistan
In a move that appears to depart from the hash trend adopted all over the globe, where cryptocurrency miners are hit with tough legislative regimes, Uzbekistan has opted to offer a softer landing. For your mining company to start operations, no license is needed. However, it is required to register with the newly established Uzbek National Agency for Prospective Projects.
Some cryptocurrencies, such as Bitcoin and Bitcoin Cash, are created using the proof of work (POW) protocol. This is a process where nodes (computers) in the network solve complex puzzles to help confirm transactions in the respective blockchain. In return, they are incentivized with native coins, such as BTC. The process involves taking huge amounts of electricity, which is making governments install policies to ensure the other sectors of their economies do not go without power.
In 2018, Uzbekistan legalized crypto trading through domestic crypto exchanges. To support the nascent crypto industry, Uzbekistan has already launched a number of renewable energy projects, mainly wind and solar power plants.
Kazakhstan has become the second-largest center for Bitcoin mining after the United States. However, other countries in Asia, such as China and Kosovo, are aggressively cracking down on crypto mining.