In a stark reminder of the heavy veil of regulation that looms over the crypto world, the National Agency for Perspective Projects (NAPP) of Uzbekistan has issued a decree tightening the noose on cryptocurrency mining within the country. This strategic move, while seemingly disadvantageous for individual miners, is shaping up to be a significant step towards legitimizing cryptocurrency operations in the country.
According to the decree, only legal entities are now allowed to engage in crypto mining activities, a move that explicitly bars individual miners from participation. On the bright side, however, this decision gives a certain level of legal clarity for companies involved in crypto mining. According to the NAPP, all mining operations must obtain the necessary permits and licenses issued by the government. This, in turn, eliminates the grey area of legality around crypto mining, allowing legitimate entities to operate within a safe regulatory environment.
On a technical level, the decree has mandated that all mining operations are to be powered exclusively by solar energy. This accompanies the growing global trend of promoting renewable energy for crypto mining, given the high environmental footprint of the activity. However, the watchdog has not completely restricted the use of Uzbekistan’s unified power system, but it has cordoned its usage to certain cases dictated by legislation that are still unclear.
There’s a catch though. While the decree sexes up legal operations for companies, it does put a damper on privacy-focused cryptocurrencies, particularly those dubbed “anonymous”. A prime example is XMR, which allows users to obscure network transactions. The NAPP has explicitly prohibited mining of such cryptocurrencies, further embodying the regulatory scepticism surrounding privacy coins.
All things considered, there is a lingering question whether this cycle of fostering legitimacy for businesses yet stymieing individual participation and privacy-focused cryptocurrencies actually fosters growth or hampers progress in the mining industry of Uzbekistan. Nevertheless, it’s a clear sign that the wheels of legal regulation are moving rapidly in the realm of cryptocurrency, and it will only be a matter of time to see which direction they finally roll.
Source: Cointelegraph
