Turkmenistan will legalize cryptocurrencies in 2026

Against the background of the continuous redrawing of the global encryption regulatory landscape, Central Asian countries have also begun to accelerate their entry into the bureau. Turkmenistan recently formally passed legislation to fully recognize and regulate the cryptocurrency industry from January 1, 2026, marking the first time that the local digital asset market has been included in the national institutional framework. According to the latest law, the government will implement strict national-level controls on trading, custody, mining and other fields. It will not only require institutions to obtain licenses, but will also establish a more transparent fund flow tracking system. As countries compete to formulate their own Web3 rules, Turkmenistan\'s accession also shows that the encryption industry is moving from \"marginal innovation\" to \"national-level infrastructure.\"

Regulation of the Cryptocurrency Industry

The government of Turkmenistan has passed comprehensive legislation to formally recognize and strictly regulate cryptocurrency activities. According to local media reports, President Serdar Berdymukhamedov signed the bill, which will take effect in early 2026.

The law identifies the mining, issuance and initial allocation of virtual assets, as well as the activities of virtual asset providers, as regulated businesses. It introduces licensing requirements, Know Your Customer (KYC) and Anti-Money Laundering (AML) rules, and mandates exchanges and custodian services to provide cold storage services.

The law also prohibits credit institutions from providing cryptocurrency services and gives the state the power to stop, cancel or force refunds of token issuance funds.

According to the bill, cryptocurrency mining companies and mining pools must register in accordance with procedures established by the Cabinet. Both private and industrial mining are allowed, but \"covert mining\" is explicitly prohibited.

The Central Bank of Turkmenistan may authorize the use of distributed ledgers or operate distributed ledgers on its own, raising concerns that citizens may be forced to use state-controlled and monitored networks.

Legal status of cryptocurrencies in Turkmenistan

The new law clearly defines the legal status of digital assets in the country. Virtual assets can be regarded as independent civil law objects or as a means of proving property or non-property rights (including claims to other civil law objects).

In Turkmenistan, cryptocurrencies are not considered legal tender, currency in circulation or securities. Instead, they are divided into two categories-secured assets and unsecured assets. Regulators will develop liquidity requirements, settlement rules and emergency redemption procedures for collateralized cryptocurrencies.

The bill also establishes government agencies responsible for regulating virtual assets, including the Cabinet, the Central Bank, the Ministry of Finance and Economy, the Ministry of Communications, the Ministry of Energy, and other central and local administrative agencies.

The Cabinet will develop unified national policies and procedures for the issuance, storage and circulation of digital assets, manage national procurement involving virtual assets, register miners, and formulate rules for the creation, operation and reporting of cryptocurrency exchanges.

Turkmenistan seeks economic diversification

Turkmenistan is a desert-dominated country in Central Asia and has the world\'s fourth largest natural gas reserves, most of which are exported to China. The country\'s decision to legalize and regulate the cryptocurrency industry comes as it strives to diversify its economy away from over-reliance on natural gas.

A government spokesman recently told Reuters that the new legislation will \"help attract investment and stimulate digitalization.\"