Turkmenistan, known as one of the most closed economies in Central Asia, has made a remarkable shift in its approach to crypto assets. Cryptocurrency mining and trading have been officially legalized in the country under the new "Virtual Assets Law," which came into effect on January 1, 2026. This step is seen as a concrete demonstration of Turkmenistan's pursuit of digitalization and diversification, given its long-standing economic model based on natural gas revenues.
The law was signed in November
Signed by President Serdar Berdimuhamedov at the end of November, the law includes crypto exchanges and mining companies within a licensing framework. The regulation envisages a system overseen by the Central Bank and authorized public institutions, while clearly defining the legal and economic status of crypto assets. Accordingly, cryptocurrencies are considered "digital property" under civil law; however, they are not recognized as a means of payment that can replace the national currency, the manat.
This approach shows that Turkmenistan prefers to act cautiously while opening its doors to crypto. The new law offers a limited and state-controlled cryptocurrency market rather than a free one. Domestic and foreign companies and entrepreneurs wishing to mine or operate cryptocurrency exchanges are required to obtain licenses from the relevant authorities. Licensed activities are subject to continuous monitoring; unregistered or unauthorized mining is explicitly prohibited. One of the most striking aspects of the regulation is the strict compliance and transparency rules. KYC (Know Your Customer) and AML (Anti-Money Laundering) obligations are mandatory for all licensed entities. The use of anonymous wallets and privacy-focused transaction methods is prohibited, aiming to ensure that all transactions are traceable. This framework distinguishes Turkmenistan from more liberal cryptocurrency hubs while aligning it with countries that have more conservative financial regulations. Allowing cryptocurrency mining is also closely linked to the country's energy strategy. Turkmenistan possesses the world's fourth largest natural gas reserves. The state aims to leverage its low-cost energy advantage to integrate energy-intensive mining activities into the economy in a controlled manner. Mining facilities are required to meet technical and safety standards, register equipment, and operate in a way that does not harm the national electricity grid. This aims to both utilize excess energy capacity and limit infrastructure risks.
The law also includes advertising and promotional restrictions aimed at protecting investors. Clear risk warnings are mandatory in crypto-related advertisements, and promising guaranteed returns is prohibited. Furthermore, the use of brands and advertisements containing state names, symbols, or official connotations is prevented, aiming to prevent the perception that crypto projects are under state protection.
According to experts, this step taken by Turkmenistan aims not to promote decentralized finance, but to create a new economic sphere under state control. The fact that cryptocurrencies are not accepted as a means of payment and that internet access is still tightly controlled clearly reveals the limitations of this initiative. Nevertheless, the provision of a licensed and predictable framework could attract foreign capital, especially in the mining and institutional investment sectors.
