Uzbekistan has introduced a state supervised crypto mining initiative by establishing the “Besqala Mining Valley” in the Republic of Karakalpakstan through a presidential decree signed on April 17, taking effect on April 20. The new framework allows registered companies to conduct crypto mining under government oversight while introducing tax incentives to attract foreign investment.
The zone enables approved entities to mine digital assets and sell them on both domestic and international crypto platforms. However, all proceeds from mining activities must be transferred through local bank accounts in Uzbekistan, ensuring strict financial monitoring within the national banking system.
Tax Exemptions and Revenue Rules to Attract Investment
To encourage participation, the decree grants a tax exemption until January 1, 2035, while requiring mining firms to pay a monthly fee equal to 1% of mining income to the zone’s governing authority. Companies must also register as residents under a new administrative directorate operating under the region’s Council of Ministers.
The framework expands mining flexibility by allowing multiple energy sources, including renewable energy, hydrogen, and grid electricity, though grid usage will incur higher tariffs.
Broader Economic Strategy for Karakalpakstan
The initiative is part of Uzbekistan’s wider effort to develop Karakalpakstan, a region identified in a 2025 UN development report as economically underdeveloped with high poverty levels. The government has also introduced parallel special zones for artificial intelligence and data center investments, offering long-term tax exemptions and discounted electricity to attract large-scale foreign capital.
Officials expect these combined special economic zones to significantly boost foreign investment, with projections exceeding $1 billion by 2030, positioning Uzbekistan as a regional hub for emerging digital infrastructure industries.
Disclaimer
This content is for informational purposes only and does not constitute financial, investment, or legal advice. Cryptocurrency trading involves risk and may result in financial loss.