Uzbekistan Establishes Besqala Mining Valley — A Dedicated Crypto Mining Zone in Karakalpakstan

Uzbekistan Launches a Major Crypto Mining Zone

President Shavkat Mirziyoyev of Uzbekistan has signed a decree establishing Besqala Mining Valley, a dedicated cryptocurrency mining zone in Karakalpakstan. The project covers the entire territory of the republic, aiming to develop crypto mining powered by green energy while drawing investment into the region.

Why This Matters

Uzbekistan has been steadily building a regulatory framework for digital assets. Since January 1 of this year, the country has operated under a special legal regime that grants stablecoins the status of an official means of payment. The establishment of a dedicated mining zone with tax holidays extending nearly a decade signals Uzbekistan's ambition to become a regional hub for industrial crypto mining in Central Asia. The project's emphasis on renewable energy — including hydrogen power stations and repurposing waste heat from mining farms for greenhouse heating — sets a noteworthy precedent for sustainable mining operations.

Energy and Infrastructure

Residents of Besqala Mining Valley are permitted to connect to the general power grid and utilize alternative energy sources, including hydrogen-powered stations. Excess heat generated by mining operations can be redirected to warm greenhouse facilities — an innovative approach to minimizing environmental impact.

The electricity tariff for miners is set at 1,800 soums per kWh, reflecting a double coefficient for Group II consumers. Special conditions are available for projects with investments exceeding $100 million.

Tax Benefits and Financial Terms

All income earned by Besqala Mining Valley residents is exempt from taxation until January 1, 2035. Instead of conventional taxes, participants pay a monthly fee of 1% of revenue to the zone's directorate.

Miners are authorized to sell mined cryptocurrency on both domestic and international exchanges, as well as through direct transactions. Revenue can be deposited into accounts at Uzbek banks.

Residency Requirements

Only companies registered in Karakalpakstan are eligible to become residents. Applicants must meet several criteria:

• Possession of suitable premises for mining equipment
• Functional electrical networks in proper condition
• No criminal convictions for economic offenses among executives or founders

To commence operations, a legal entity must obtain resident status and secure approval from the National Agency for Prospective Projects.

Broader Context: Uzbekistan's Crypto Push

The Besqala Mining Valley initiative builds on Uzbekistan's expanding engagement with the crypto sector. Since the beginning of this year, a special legal regime has been in effect that recognizes stablecoins as an official payment instrument. The creation of a mining zone offering long-term tax holidays tied to green energy infrastructure underscores the government's systematic approach to fostering the crypto industry within a regulated framework.