In a significant policy shift, Turkmenistan has officially legalized cryptocurrency mining and trading through a new licensing system, as announced by President Serdar Berdimuhamedov. This landmark decision, made on Thursday, is designed to modernize the nation”s financial landscape while still restricting the use of digital assets for payments.
The newly enacted law establishes a regulatory framework that mandates specific licenses for cryptocurrency exchanges to operate legally within the country. However, it is crucial to note that digital currencies will not be recognized as legal tender or accepted for the payment of goods and services, highlighting the government”s intent to maintain stringent control over the national economy.
Turkmenistan”s economy, heavily reliant on natural gas exports, has been characterized by its isolation and rigid regulations since gaining independence from the Soviet Union in 1991. With this legislative change, the government aims to attract foreign investment and promote digitalization, potentially signaling a new era for the country”s economic policies.
The law outlines comprehensive rules governing the creation, storage, usage, and circulation of virtual assets, while also clarifying their legal status. This framework will be overseen by the central bank, which will manage the licensing process for exchanges.
Despite the legalization of mining and trading, the state continues to exercise strict control over internet access, which may present challenges for the growth of the crypto sector. Observers will be keen to evaluate whether this move will successfully draw investment or if the nation”s history of restrictive governance and internet policies will deter potential stakeholders.
Furthermore, the implications of this change suggest that the government is seeking to leverage its domestic energy resources, particularly as it embarks on significant infrastructure developments, such as a pipeline project aimed at connecting to Afghanistan, Pakistan, and India.
While the allowance for cryptocurrency operations marks a rare instance of economic liberalization in Turkmenistan, the limitations placed on the use of these assets indicate a clear preference for maintaining state control over financial stability. The broader impact of this legislation on the nation”s integration into the global financial system remains to be seen.
