Uzbekistan Wants Bitcoin Miners To Go Solar, Pay No Income Tax

Under a new presidential decree, local crypto miners will pay double the price for electricity pulled from the standard energy grid


Uzbekistan’s capital city of Tashkent | Source: Shutterstock


key takeaways

  • Uzbekistan wants to inspire growth in its local crypto mining economy despite widespread energy outages earlier this year
  • The government hopes charging miners a premium for energy pulled from the standard grid will hasten their switch to solar

Uzbekistan hopes to shift crypto miners away from coal by legalizing the use of solar power within the heavily regulated local industry, Reuters reports, citing a presidential decree published this week.

The Central Asian nation will also waive income tax for both foreign and domestic crypto companies moving forward. 

Under the mandate, local miners will pay double the price for electricity pulled from the standard energy grid. They also could face additional tariffs for use during periods of high demand.

Despite a lack of formal licensing, crypto mining outfits across the country are required to register with the new Uzbek National Agency for Perspective Projects. Uzbekistan legalized crypto trading in 2018, but just one exchange is currently licensed to operate — this is where local crypto miners sell the digital assets they generate.

The new regulatory framework will require crypto exchanges to perform know your customer (KYC) checks on crypto traders and keep the records for five years, CoinDesk reported.

Proposed legislation from January 2020 would have developed a national mining pool, providing discounted electricity to member miners. However, it appears the new solar incentives supersede those intentions, with a mind to provide enough regulatory freedom to inspire growth in the local industry.

Indeed, the Tashkent government hopes the nation’s crypto industry will install and operate its own solar panels, taking pressure off the country’s struggling energy infrastructure.

Uzbekistan still reeling from bitcoin mining in neighboring Kazakhstan

The move is a response to power outages that struck the country and neighboring Kyrgyzstan earlier this year, after refugee bitcoin miners fled China for Kazakhstan en masse after Beijing’s blanket ban last June. 

Kazakhstan’s power grid, on which Uzbekistan and Kyrgzstan’s business and residential sectors also rely, suffered extensively. Electricity, heat and gas services were widely disrupted, and government officials eventually blamed unprecedented surges in energy demands on crypto miners. 

While no deaths were attributed to the outages, arrivals at Uzbekistan’s Tashkent International Airport were closed, hundreds were trapped in train cars, and dozens found themselves stuck in offline elevators and ski lifts, analysts at the Central Asia-Caucasus Institute & Silk Road Studies Program noted. In a blog post, the researchers described crypto mining as “the straw that broke the camel’s back.”

All three countries were forced to purchase expensive power via an old Soviet energy grid to resolve the issues, despite the region’s abundant hydropower and carbon energy sources.

Kazakhstan had housed around 7% of Bitcoin’s hashrate in the leadup to China’s ban but was responsible for more than 18% just two months later, according to the Cambridge Bitcoin Electricity Consumption Index. This meant Kazakhstan was suddenly the second-biggest bitcoin mining country in the world, after the US.

Uzbekistan, by comparison, mines far less bitcoin. The country contributed just 0.05% of the total hashrate last August, although that could change now that crypto miners won’t pay income tax for the foreseeable future.

Get the day’s top crypto news and insights delivered to your email every evening. Subscribe to Blockworks’ free newsletter now.

Want alpha sent directly to your inbox? Get degen trade ideas, governance updates, token performance, can’t-miss tweets and more from Blockworks Research’s Daily Debrief.

Can’t wait? Get our news the fastest way possible. Join us on Telegram and follow us on Google News.


upcoming event

MON - WED, MARCH 18 - 20, 2024

Digital Asset Summit (DAS) is returning March 2024. This year’s event will be held in our nation’s capital, where industry leaders, policymakers, and institutional experts will come together to discuss the latest developments and challenges in the ever-evolving world of cryptocurrency. […]

upcoming event

MON - WED, SEPT. 11 - 13, 2023

2022 was a meme.Skeptics danced, believers believed.Eventually, newcomers turned away, drained of liquidity and hope.Now, the tide is shifting and it’s time to rebuild. Permissionless II is the brainchild of Blockworks and Bankless. It’s not just a conference, but a call […]

recent research

Curve's Stablecoin and Lending Market


AMMs are at the root of everything elegant and useful in DeFi.That's why Curve put LLAMMA at the center of its lending protocol.



Dogecoin is handling more transactions than both Ethereum and Bitcoin — with drastically lower fees


Some of the banks are getting to a point where “they may decide” for or against CBDC implementation


The Curve community is gauging whether or not solid price oracles should be implemented in select pools with deep liquidity


Despite MiCA’s passage, both ESMA and Europe’s Systemic Risk Board want to ensure crypto is regulated and investors are protected


Bloomberg found that nearly half of crypto companies recently surveyed receive audit services from Deloitte, EY, PwC or KPMG


Hong Kong is “rich in tycoons and well-capitalized family offices that could fund crypto firms moving into the city,” Matrixport’s head of research told Blockworks