- Turkmenistan legalizes crypto but imposes licensing, KYC, AML, and cold storage requirements.
- Mining must be registered; credit institutions cannot offer crypto services.
- The central bank may run state-led ledgers, keeping digital assets under strict supervision.
Turkmenistan has taken a major step into the world of digital assets, legalizing cryptocurrency while maintaining strict government oversight. The law, signed by President Serdar Berdimuhamedov and set to take effect in 2026, introduces licensing, registration, and surveillance measures that reflect the country’s cautious approach to emerging financial technology.
Strict Licensing and Oversight for Crypto Services
The new legislation imposes comprehensive requirements on crypto exchanges, custodians, and miners. Firms must adhere to licensing rules, know-your-customer (KYC) protocols, anti-money laundering (AML) standards, and cold storage mandates. Credit institutions are barred from offering crypto services, while authorities retain the power to halt or reverse token issuances. Mining operations must register officially, and covert activity is explicitly forbidden.
Notably, the law allows Turkmenistan’s central bank to authorize distributed ledgers or operate its own, effectively placing citizens on state-monitored platforms. Digital assets are classified into backed and unbacked categories, with regulators setting conditions for liquidity, settlements, and emergency redemption for the backed class. Despite legalization, cryptocurrencies are explicitly not considered legal tender, currency, or securities.
Part of a Global Trend
Turkmenistan joins a growing list of countries shaping formal crypto frameworks. Earlier this week, the UK announced a tax proposal easing capital gains obligations for decentralized finance users, signaling an international effort to integrate crypto responsibly. Similarly, Bank of England Deputy Governor Sarah Breeden highlighted the UK’s alignment with US stablecoin regulations. Globally, regulators are responding to the rise of digital assets, with Basel Committee chair Erik Thedéen acknowledging that new approaches may be needed for crypto risk management.
Balancing Innovation and Control
The law illustrates Turkmenistan’s careful balancing act: embracing digital finance without relinquishing state authority. The country, with around 7 million people and an economy reliant on natural gas exports, remains one of the world’s most centralized and authoritarian regimes. Internet access is heavily restricted, and platforms like X and Telegram are banned. The move into crypto signals a willingness to adopt innovation while ensuring it stays under strict government oversight.
As Turkmenistan prepares to implement its crypto framework, the law may serve as a model for other highly controlled states navigating the challenge of introducing digital assets without compromising state power.
