Uzbekistan has announced the creation of a new tax-free crypto mining zone in Karakalpakstan, as part of a broader effort to attract foreign investment and expand the use of renewable energy.
Under a decree signed by Shavkat Mirziyoyev, the «Besqala Mining Valley» will allow regulated cryptocurrency mining with income from operations exempt from taxes until 2035.
Incentives and regulations
The initiative is designed to encourage large-scale, legal mining operations powered primarily by solar energy. Only registered companies will be allowed to operate in the zone, and all activities will be subject to licensing and state oversight.
Operators will be permitted to mine, trade, and convert digital assets, provided that financial transactions go through Uzbekistan’s banking system. Despite tax exemptions, companies will still pay monthly fees based on revenue and higher electricity tariffs when using the national grid.
Focus on clean energy
Authorities say the project prioritises renewable energy use, particularly solar power, reflecting Uzbekistan’s push to diversify its energy mix and reduce environmental impact.
Tight compliance measures
The framework includes strict controls aimed at preventing illegal activity. Companies and their owners must undergo background checks and comply with financial transparency requirements.
Evolving crypto strategy
Uzbekistan’s approach to cryptocurrency has gradually shifted since its first regulatory steps in 2018. Initially cautious, the country imposed strict conditions on mining, including requirements to use solar energy and higher tariffs for grid electricity.
The new mining hub signals a more proactive strategy, combining incentives with regulation to avoid issues seen in neighbouring markets while positioning Uzbekistan as a competitive destination for crypto infrastructure.
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