Key Insights
- Cryptocurrency mining and trading in Turkmenistan are currently legalized with tight supervision of the central bank.
- Digital assets are controlled but not permitted for payment or banking purposes.
- Infrastructure restrictions may exist where foreign miners can work as long as they are registered.
Crypto Mining and Trading in Turkmenistan Legalized Under New Regulatory Framework
Crypto mining and trading in Turkmenistan have formally become legal following the entry into force of a new law signed by President Serdar Berdimuhamedow in late November. The legislation establishes a regulated structure for digital asset activity in a country where cryptocurrency operations were previously prohibited.
Crypto Mining and Trade in Turkmenistan are subject to the State.
In accordance with the recently adopted Law on Virtual Assets, cryptocurrency mining and trading can be conducted only in a highly controlled regime controlled by the central bank.
Digital assets can now be considered by civil law, which establishes a legal framework of crypto-activity, as well as a licensing framework of exchanges, custodianship services, and mining.
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Moreover, the legislation clearly states that cryptocurrencies will not be treated as legal tender, currency, or securities. All participants in crypto mining and trading in Turkmenistan must comply with registration and licensing rules.
Strict Compliance Rules are shaping the Market.
The legislation encompasses wide-ranging compliance requirements throughout the crypto industry. Exchanges are subject to mandatory know-your-customer and anti-money laundering rules, anonymous wallets are prohibited, and advertising is tightly regulated. Cryptocurrency wallets are prohibited, and advertisements related to them are severely censored.
Banking is also restricted in the digital asset ecosystem as credit institutions are prohibited from offering crypto services. Regulators have the power to freeze activities or cancel the issuance of tokens in the event of concerns regarding compliance.
Moreover, the central bank can authorize certain distributed ledger systems, focusing actions on permissioned and strictly supervised networks.
These steps align crypto mining and trading in Turkmenistan with the rest of the country’s regulatory regime, which emphasizes state control and restricted market access.
Foreign Investment Permitted Under Conditions
The legislation allows non-residents to mine cryptocurrencies in Turkmenistan, assuming that they pass the registration successfully. The activities must still be controlled locally and given the green light in cooperation with local regulations, even with foreign involvement.
However, besides this opening, larger limitations to internet access, financial flows, and foreign investment still exist. The factors can restrict the rate of access to the market by international miners or service providers, despite legal access being increased.
The Birth of Ban to Legal Recognition
Before the implementation of the law, crypto mining and trading were prohibited in Turkmenistan. Regular raids were conducted by the police on unlawful mining operations, and equipment was seized. These activities were also enforced in the trading activities and the mining activities, which occurred without permission.
Despite the ban, a black market crypto community still existed, which used virtual private networks, peer-to-peer platforms, and covert mining platforms. These were arrangements of going around internet controls and the implementation of enforcement measures.
There was no reliable information on the scale of this informal practice; however, there is an estimate that by 2026, the number of cryptocurrency users in Turkmenistan can be up to almost half a million, which is about 6.4 per cent of the population, and the activity will pass to a legal level.
Energy Overcapacity Hits the Infrastructure
The scope of the power capacity is one of the most discussed issues of crypto mining and trading in Turkmenistan. The country is endowed with a lot of natural gas and produces more electricity than it consumes. Installed power capacity is more than 5.4 gigawatts and the highest demand of domestic is about 4.3 gigawatts.
Oversupply of the electricity grids and low-energy prices can support the crypto mining operations that are energy-intensive.
However, there are structural issues with the electricity grid.
Most of the transmission and distribution system is of Soviet origin and suffers from outages, inefficiency, and problems with power quality.
Although generation capacity is not a significant issue, grid instability poses a challenge to operations in large-scale mining. Cryptocurrency mining would also need to invest heavily in individual infrastructure and power conditioning facilities within the industry.
The environment of an area influences expectations
The move by Turkmenistan is set against the backdrop of developments in the region. In 2021, Kazakhstan, which borders it, became a large Bitcoin mining center as mining operators moved to the country following a mining ban in China.
Another ally, Pakistan, has progressed in crypto regulation in 2025 with the creation of the Pakistan Virtual Assets Regulatory Authority to permit the activities of exchanges, including Binance and HTX, the development of a Bitcoin reserve, and the appointment of a former Binance CEO, Changpen Zhaog, better known as CZ, as a strategic advisor.
In comparison with these developments, crypto mining, as well as trading, in Turkmenistan are being rolled out with less breadth and more controls, due to the domestic policy priorities.
