Uzbekistan announces: In 2020, priority will be given to establishing a "national mining pool" and introducing licensed exchanges.

Uzbekistan recently announced that establishing a "national mining pool" will be a priority for 2020. Miners participating in this pool will benefit from low electricity costs. Additionally, the country will launch a compliant licensed cryptocurrency exchange to facilitate the sale of cryptocurrencies for miners.

National Mining Pool

The National Agency for Project Management (NAPM), led by the President of Uzbekistan, announced its 2020 plans this week, which include regulating cryptocurrency trading, implementing blockchain technology, and establishing a national mining pool.

According to reports, the main motivation of this initiative is to ensure economic efficiency and increase transparency and security in the domestic cryptocurrency mining industry. NAPM believes:

This will improve energy efficiency and make Uzbekistan more attractive to foreign investors.

Establishing a compliant licensed cryptocurrency exchange is a measure to combat black market trading, aiming to steer crypto miners away from the underground economy. The exchange, Uznex, operated by the Korean Kobea Group, will officially launch on January 20th, offering 7 trading pairs including Bitcoin, Bitcoin Cash, Ethereum, Litecoin, and USDT on its testing platform.

Inclusive Regulatory Framework

Last year, Uzbekistan authorities introduced regulations that could have negative impacts on the cryptocurrency industry. However, it appears that these measures are paving the way for future regulatory frameworks.

The country first proposed a draft law in September last year, significantly increasing electricity prices for crypto miners. The law stated:

Companies involved in crypto assets (including miners) must pay a rate three times higher than the current electricity tariff for their business category, regardless of their electricity consumption.

This move sparked discontent within the industry, with claims that "at current cryptocurrency prices, any increase beyond 1.7 times the regular electricity tariff would reduce miners' profitability to zero."

In December last year, NAPM also banned Uzbek citizens from buying and trading cryptocurrencies, allowing token sales only through exchanges licensed in the country.

With the establishment of a national mining pool and the introduction of licensed cryptocurrency exchanges, the situation is expected to improve. Vyacheslav Pak, Deputy Director of NAPM, stated:

We will charge high electricity prices to non-participating miners, which I believe will be one of the means to encourage people to participate in the national mining pool. We must be prepared in time to prevent investors from flowing to neighboring countries.

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