The zone, named Besqala Mining Valley, operates under a new directorate within Karakalpakstan's Council of Ministers
Crypto News
Uzbekistan has established a state-supervised crypto mining zone in the Republic of Karakalpakstan under a presidential decree signed April 17 and effective April 20, creating a framework that lets registered operators sell mined digital assets on both domestic and foreign platforms while keeping all proceeds inside the country's banking system.
The zone, named Besqala Mining Valley, operates under a new directorate within Karakalpakstan's Council of Ministers. Registered legal entities can apply for resident status through that body, access a mix of approved power sources, and sell mined crypto through direct contracts or via foreign exchanges. All proceeds from those sales must be transferred to bank accounts held in Uzbekistan regardless of where the transaction took place.
Operators within the zone are exempt from taxes through Jan. 1, 2035, and are required to pay a monthly fee of 1% of mining income to the zone's directorate. Officials were separately directed to submit draft amendments to Uzbekistan's tax code within two months of the decree taking effect.
The decree also revises the country's earlier rules on mining power. A 2023 decree from Uzbekistan's National Agency for Perspective Projects required licensed mining firms to operate exclusively on solar energy. The new framework permits renewable energy, hydrogen, and grid electricity within the zone, with higher tariff rates applied to grid usage.
Karakalpakstan has become the focus of Uzbekistan's broader special-zone investment strategy. A 2025 United Nations Development Programme report described the region as having high poverty rates and limited industrial development, making it a priority for targeted investment incentives. A separate tax-free zone for artificial intelligence and data center projects was launched in the region in November 2025, offering full tax and duty exemptions through 2040 to foreign investors committing $100 million or more.
Uzbekistan projected the AI zone would draw over $1 billion in foreign investment by 2030, according to a Reuters report at the time. The crypto mining framework follows the same structural model, using long-term tax relief and zone-level administration to position the region as a destination for capital-intensive digital infrastructure.
The move also serves a foreign currency function. By requiring that proceeds from foreign platform sales flow back through domestic bank accounts, the government retains oversight of how mining revenues enter the Uzbek financial system, balancing openness to external markets with controls on capital movement.
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