Turkmenistan has approved legislation to legalise and regulate the cryptocurrency industry. The laws will come into effect on January 1, 2026. The newly enacted legislation will place the crypto industry under tight state controls. Regulating the Crypto Industry The Turkmen government has passed sweeping legislation that formally recognises and tightly regulates cryptocurrency activities. According to local media reports , President Serdar Berdimuhamedov signed the law, which will take effect in early 2026. The law recognises mining, issuance and initial placement of virtual assets, as well as the activities of virtual asset providers as regulated operations. It introduces licensing requirements Know-Your-Customer (KYC) and Anti-Money Laundering (AML) rules, and mandates cold-storage provisions for exchanges and custodial services. The law also prohibits credit institutions from offering cryptocurrency services and gives the state authority to halt, void, or compel refunds of token issuances. Under the legislation, crypto mining companies and mining pools must register through procedures established by the Cabinet of Ministers. Both private and industrial mining are permitted, but “hidden mining” is explicitly banned. Turkmenistan’s central bank may authorise distributed ledgers or operate its own, raising concerns that citizens could be pushed onto state-controlled and surveilled networks. The Legal Status Crypto in Turkmenistan The new law clearly defines the legal status of digital assets in the country. A virtual asset may be regarded either as an independent object of civil law or as a means of certifying property or non-property rights, including claims to other civil law objects. Cryptocurrencies will not be recognised as legal tender, currency, or securities in Turkmenistan. Instead, they are categorised into two groups—backed and unbacked assets. Regulators will define liquidity requirements, settlement rules, and emergency redemption procedures for backed cryptocurrencies. The legislation also establishes the government bodies responsible for regulating virtual assets. These include the Cabinet of Ministers, the Central Bank, the Ministry of Finance and Economy, the Ministry of Communications, and the Ministry of Energy, along with other central and local executive authorities. The Cabinet will set unified state policy and procedures for issuing, placing, and circulating digital assets, managing state procurement involving virtual assets, registering miners, and establishing the rules for the creation, operation, and reporting of crypto exchanges. Turkmenistan Looks to Diversify Its Economy Turkmenistan is a largely desert nation in Central Asia and holds the world’s fourth-largest natural gas reserves, most of which are exported to China. Its decision to legalise and regulate the crypto industry comes amid efforts to diversify its economy beyond gas. A government spokesperson recently told Reuters that the new legislation will “help attract investment and stimulate digitalization.” Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
