Turkmenistan, Cryptocurrency Mining and Trading Legalized in 2026… Payments Fully Banned

Source: TokenPost Original Title: Turkmenistan to Legalize Cryptocurrency Mining and Trading in 2026… Payments Fully Banned Original Link: https://www.tokenpost.kr/news/cryptocurrency/320182 Turkmenistan will officially legalize cryptocurrency mining and trading starting in 2026. However, the use of digital assets as a ‘means of payment’ is completely prohibited, revealing an intention to strengthen government control over the national currency.

This move follows the ‘Virtual Asset Law’ signed by President Serdar Berdymukhamedov in late November last year, which took effect on January 1, 2026. The law is significant because it marks a shift in Turkmenistan’s stance on the digital asset market, despite being one of the most closed and centrally controlled economies in the world.

Cryptocurrency Mining and Trading Allowed… Under State Control

Under the new legal framework led by the Central Bank of Turkmenistan, cryptocurrency mining and trading will operate on a permit basis. Miners and exchanges must obtain government licenses, register equipment, verify user identities(KYC), and comply with anti-money laundering(AML) regulations. Anonymous wallets are banned, and advertising is restricted.

The law explicitly states that cryptocurrencies are not recognized as legal tender, currency, or securities, and cannot be used for purchasing goods and services. Without approval from the central bank, decentralized ledger systems cannot be used, effectively resulting in a ‘permitted blockchain’ structure.

While these are meaningful changes, they follow the existing economic model centered on surveillance and control. The government also retains the authority to halt cryptocurrency operations or invalidate token issuance if necessary.

Abundant Electricity but Outdated Infrastructure Hinders Development

Turkmenistan is rich in natural gas reserves and produces more electricity than it consumes. Its current generation capacity is 5.4GW, with a maximum domestic demand of around 4.3GW. This surplus electricity could be advantageous for energy-intensive cryptocurrency mining.

However, the core issue lies in the electrical grid infrastructure. Many transmission and distribution facilities were built during the Soviet era and suffer from aging, inefficiency, and frequent power outages. Therefore, private investment in dedicated power infrastructure is considered necessary for large-scale mining farms to operate reliably.

Severe Currency Controls… Banning Cryptocurrency Payments Was Expected

The complete ban on cryptocurrency payment functions is a measure to protect the national currency, the manat. Although the official exchange rate is fixed at 3.5 manat per US dollar, the black market rate is believed to be much lower. High inflation and foreign exchange restrictions have led to concerns about the devaluation of assets, and some consumers are already saving and transacting in dollars, creating an ‘unofficial dollarization.’

From the government’s perspective, if cryptocurrencies spread as a means of payment, the credibility of the manat could further decline, and existing monetary policies might be destabilized.

From Underground Communities to Official Users… Up to 500,000 Expected

Until now, cryptocurrency activities in Turkmenistan were illegal, with frequent crackdowns and equipment seizures. Nevertheless, underground communities using VPNs, peer-to-peer(P2P) platforms, and covert mining methods have existed.

With this legalization, these activities are expected to come into the open. Local estimates suggest that by the end of 2026, up to 500,000 people could be using cryptocurrencies, accounting for about 6.4% of the population. This shift is also seen as part of the government’s strategy to increase tax revenue and diversify the economy through digital asset policies.

Market Interpretation

Turkmenistan’s formal acceptance of the cryptocurrency industry, after maintaining a closed economic system, is symbolically significant for the expansion of digital assets in Central Asia. However, the acceptance is limited to mining and trading, with a clear intent to prevent cryptocurrencies from becoming a payment method that challenges monetary sovereignty.

Strategic Points

• Low electricity costs present opportunities for mining industry growth, but outdated power infrastructure poses risks
• Understanding legal procedures and regulations under strict government control is essential
• Monitoring cryptocurrency demand considering the fixed manat exchange rate and black market disparities

Terminology

• KYC: Know Your Customer, customer identity verification regulations
• Permitted Blockchain: Closed blockchain where only approved participants can operate
• Manat: Official currency of Turkmenistan, subject to exchange rate controls