Central Asian nation Uzbekistan will permit crypto mining using solar-powered energy, according to a presidential decree released earlier this week.
Uzbekistan Legalizes Solar-Powered Crypto Mining
Reuters reported that the decree also excluded local and foreign mining firms from paying income taxes.
The new law further states that mining firms are allowed to connect to the country’s main electricity grid but will have to pay double the normal price, adding that at a time when demand for electricity is high, extra fees will be charged.
To carry out mining operations, firms do not need an operating license. However, they must be registered under the newly created Uzbek National Agency for Perspective Projects, the document said.
As per the report, Uzbekistan wants crypto mining firms to carry out operations by stationing their own solar panels.
Promoting Crypto Mining Operations
Crypto mining is a process whereby sophisticated computers or nodes verify and process blockchain transactions for a particular proof-of-work (PoW) crypto asset. To verify such transactions, a large amount of energy is required. Hence, miners sought for cheap electricity supplies to carry out their operations effectively but only few countries are able to offer that.
With Uzbekistan offering these cheap electricity supplies, the central Asian nation has become a hotbed for miners.
The country has continued to maintain a friendly stance on mining operations. Despite power outages encountered earlier this year in its capital and other major cities, Uzbekistan did not blame miming activities for it nor did it launch a crackdown on mining operations like China.
Instead, it is seeking to accommodate such activities by moving from coal energy to solar energy.
Crackdown on Crypto Mining
While the Central Asian country is encouraging mining operations, several other nations and jurisdictions are clamping down on the industry, claiming that crypto mining damages the electricity grid and has a negative effect on the environment.
In November, China issued stern warnings to its state-owned enterprises (SOEs) against involvement in cryptocurrency mining operations.
Two months ago, Coinfomania reported that a New York bill to ban crypto mining passed the Senate Environmental Committee.