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Uzbekistan’s trial of stablecoins for payments and Turkmenistan’s legalisation of crypto mining and exchanges highlight how Central Asian regulators are cautiously exploring digital assets while maintaining strict payment controls.
Uzbekistan is to introduce a special legal regime allowing the use of stablecoins for payments within a regulatory sandbox, effective January 1, 2026, the Justice Ministry said in a statement on its social media channels.
The sandbox, managed by the National Agency for Perspective Projects (NAPP) and the Central Bank, will allow the testing of stablecoins for payments within a controlled environment.
The Ministry said the sandbox will be used to monitor risk, market behavior, and technical issues before any broader rollout is considered.
Companies resident in Uzbekistan will also be permitted to issue tokenized securities, and licensed stock exchanges will launch dedicated trading platforms for their listing, the Ministry added. These initiatives are separate from the stablecoin sandbox but signal broader interest in digital asset frameworks.
The moves align with a wider embrace of digital currencies that appear to be gaining momentum in Central Asia.
On November 28, 2025, President Serdar Berdimuhamedov signed a law legalizing cryptocurrency mining and exchanges in Turkmenistan.
The new rules, also due to take effect on January 1, 2026, allow citizens and companies to mine cryptocurrencies after registering in the Central Bank's database, according to the law.
However, the law continues to prohibit the use of digital assets as a means of payment within Turkmenistan.
The developments in Uzbekistan and Turkmenistan follow Kazakhstan's 2025 crypto overhaul, which focused on digital asset trading and regulation rather than explicitly encouraging adoption.
In November 2025, Kazakh President Kassym-Jomart Tokayev signed amendments allowing unsecured digital assets to be traded throughout Kazakhstan, whereas previously their turnover had been limited to the Astana International Financial Center.
Slow progress
Fedor Ivanov, director of analytics at financial consultancy Shard, told Vixio that it will be important to wait for the results of Uzbekistan’s sandbox before making predictions about the future of cryptocurrency in the country.
He noted that Uzbekistan had been one of the first countries in Central Asia to adopt legislation regulating cryptocurrencies, but added that the sector has seen limited development in recent years.
“Undoubtedly, the reform will not go unnoticed and significantly speed up the digitalization of the Uzbekistan payment system,” said Svitlana Bielova, CEO of payment consultancy Monoup.
However, the new rules mark only a gradual step toward liberalisation, as the country shifts away from the strict stance on cryptocurrencies adopted in 2023.
According to Ilkhom Azizov, senior partner at Tashkent-based law firm Azizov & Partners, Uzbekistan still lacks a fully developed cryptocurrency framework, which could lead to legal challenges.
“It's clear that a new instrument lacking sufficient regulation compared to cash and traditional payment instruments will lead to conflicts and complications, or will encounter implementation difficulties,” Azizov warned.
He added that the Uzbek government has pledged to engage experienced consultants to help establish the sandbox and to limit the scale of the experiment at this stage.
He also noted that service providers’ access to transactions with ordinary resident individuals should be carefully monitored, as social risks and the absence of a single issuer or real collateral could pose challenges.
Turkmenistan is catching up
By legalising cryptocurrencies, Turkmenistan is now following the example of other Central Asian countries, Ivanov said.
Turkmenistan, one of the most politically and economically closed countries in the post-Soviet space, has long been hesitant to legalize cryptocurrencies. According to Ivanov, over the years, cryptocurrency has received at least some recognition in Kazakhstan, Uzbekistan, Kyrgyzstan and Mongolia, but not in either Turkmenistan or Tajikistan.
The new law is Turkmenistan’s first step toward formalising cryptocurrency activities.
“Naturally, bylaws will still need to be adopted, and how this will work in practice will need to be assessed,” Ivanov added.
A trend appears
Monoup’s Bielova believes an overall trend is discernible: with Kazakhstan leading the way, developments in Uzbekistan and Turkmenistan signal a regional shift in policy.
“The main reasons are likely the search for new sources of foreign investment and opportunities to diversify their economies,” Belova added.
For countries in the region with inexpensive electricity, especially Turkmenistan, crypto mining offers an opportunity to monetise surplus energy, she said. Opening up to digital assets may also be intended to position these nations as high-tech jurisdictions and create new employment opportunities.
Another reason Central Asian countries are adopting cryptocurrency regulations may be to facilitate international trade. Ivanov told Vixio that, under the special regime, cryptocurrency will likely remain largely prohibited for settlements in Uzbekistan, with exceptions for foreign trade.
“In general, not only Uzbekistan but also other countries, including Russia and China, are following this path,” he added.
Tightening know-your-customer (KYC) and anti-money laundering (AML) requirements for crypto transactions across Central Asia will likely be necessary to avoid sanctions risks and the financing of illegal activities, Belova added.
“Despite the ability to independently shape regulations, countries [in the region] operate in an international market, and to cooperate with other participants, they must comply with generally accepted standards, particularly those of AML and financial control,” she said.
As a jurisdiction with more advanced crypto regulation, Kazakhstan may serve as a model for others, and there is a possibility that Central Asian countries could eventually harmonise rules.
“It's likely that by the end of 2026, we'll see the formation of an informal ‘crypto alliance’ [between Central Asian countries] with coordinated regulatory approaches,” Belova told Vixio.
For payment service providers (PSPs) operating or considering entry into Central Asia, these developments underscore the need for a cautious, compliance-first approach.
Uzbekistan’s sandbox provides a controlled environment to test stablecoin-based payments, but widespread adoption remains limited, and legal frameworks are still evolving.
In Turkmenistan, meanwhile, mining and exchange activities are permitted, yet payment use is explicitly prohibited, highlighting the fragmented regulatory landscape.
PSPs should closely monitor regulatory updates, prioritise AML/KYC alignment and assess operational models that can accommodate sandbox experiments, cross-border transactions, and potential future harmonisation efforts, positioning themselves to act swiftly once broader regulatory clarity emerges.
