Uzbekistan Creates Special Crypto Mining Zone With Tax Breaks
Share:
Apr 17 (effective Apr 20) Uzbekistan created the Besqala Mining Valley in Karakalpakstan: registered firms may mine crypto, sell on domestic and foreign platforms (CEX/DEX) and repatriate all proceeds through Uzbek banks. Mining firms receive tax exemptions until Jan 1, 2035 and must pay a 1% monthly fee on mining income; a local directorate will grant resident status and tax-code amendments are due within two months. Policy relaxes 2023 solar-only rules to allow renewables, hydrogen and grid power (grid at higher tariffs), signaling regulatory clarity to attract investment, boost crypto mining adoption and increase mining supply/liquidity.
Predictions Markets
See what traders are focused on
The zone allows approved companies to mine digital assets, sell them on domestic and foreign platforms, and repatriate all proceeds through Uzbekistan’s banking system. Mining firms will receive tax exemptions until Jan. 1, 2035, while paying a 1% monthly fee on mining income.
Uzbekistan Opens Besqala Mining Valley
Uzbekistan launched an ambitious new initiative to attract cryptocurrency mining investment and boost economic development in one of its most underserved regions. Under a presidential resolution that was signed on April 17 and effective from April 20, the country established the “Besqala Mining Valley,” which is a special crypto mining zone that spans the Republic of Karakalpakstan.
The new framework creates a regulated environment where approved mining companies can legally operate, sell mined digital assets on both domestic and international platforms, and channel all proceeds back into Uzbekistan’s banking system.
The zone is open to registered legal entities that wish to conduct crypto mining activities. Companies can apply for resident status through a newly created directorate operating under Karakalpakstan’s Council of Ministers.
One of the more interesting features of the decree is that miners are allowed to sell their crypto assets not only on Uzbekistan’s national exchanges but also on foreign platforms and through direct contracts. They may also exchange mined assets for other liquid cryptocurrencies. However, the government imposed strict financial controls that require all revenues from crypto sales to be transferred into bank accounts within Uzbekistan.
To make the zone even more attractive to investors, the government introduced major tax incentives. Mining companies operating in the Besqala Mining Valley will receive tax exemptions until Jan. 1, 2035. In return, they must pay a monthly fee equal to 1% of their mining income to the zone’s directorate. Authorities have also been instructed to prepare amendments to the national tax code within two months, suggesting further regulatory updates may soon follow.
This policy is part of Uzbekistan’s strategy of using special economic zones to stimulate investment in Karakalpakstan, which is a region that faces high poverty levels and limited industrial growth.
It is also a huge shift in the country’s earlier approach to crypto mining. In 2023, mining firms were required to rely solely on solar energy. The new rules are more flexible, and they allow operators to use a combination of renewable energy, hydrogen power, and grid electricity, although higher tariffs will apply to grid-based consumption.
The crypto mining zone is part of a push to transform Karakalpakstan into a technology and investment hub. In late 2025, Uzbekistan also announced a separate tax-free zone focused on artificial intelligence and data centers that offer discounted electricity and tax breaks for foreign investors. Companies investing at least $100 million in that project can receive exemptions until 2040.
