Key Takeaways
- • Uzbekistan establishes Besqala Mining Valley, a special economic zone in Karakalpakstan dedicated to cryptocurrency mining with complete tax exemption until January 1, 2035, signed by President Shavkat Mirziyoyev via presidential decree.
- • Tax structure replaces traditional levies with 1% monthly revenue fee to zone administration; electricity pricing set at 1,800 soms per kWh for standard consumers, with exceptions for projects exceeding $100 million in investment.
- • Green energy infrastructure mandated, with miners required to use unified energy systems powered by renewable and hydrogen sources; excess heat from mining farms can be redirected to heat greenhouses, creating integrated economic value.
- • Operational flexibility granted for cryptocurrency trading on domestic and international exchanges, with revenues deposited in Uzbek bank accounts; only registered companies in Karakalpakstan with suitable premises and clean economic records eligible.
- • Strategic policy shift reflects Uzbekistan's evolution toward regulated crypto adoption, following January 2026 introduction of stablecoins as official payment method, signaling broader institutional acceptance of digital assets.
Summary
Uzbekistan has formally launched Besqala Mining Valley, a landmark special economic zone in the Republic of Karakalpakstan designed to attract cryptocurrency mining operations through aggressive tax incentives and renewable energy infrastructure. President Shavkat Mirziyoyev signed the decree establishing the zone, which grants participating miners complete exemption from all taxes and fees related to mining operations through January 1, 2035. This represents a significant policy departure for a nation that previously enforced strict restrictions on Bitcoin mining and peer-to-peer cryptocurrency trading.
The zone's fiscal structure replaces traditional corporate taxation with a fixed 1% monthly revenue fee paid to zone administration, creating predictable operating costs for miners. Standard electricity pricing is set at 1,800 soms per kWh for Group II consumers, though projects representing investments exceeding $100 million receive preferential tariff treatment. Miners gain unrestricted rights to sell cryptocurrency on both domestic and international exchanges or through direct transactions, with revenues freely credited to Uzbek bank accounts. This operational flexibility addresses previous regulatory constraints that limited trading to state-licensed service providers.
Energy infrastructure forms a core competitive advantage, with the zone powered by a unified grid incorporating renewable and hydrogen energy sources. The design allows mining operators to redirect excess thermal output to heat agricultural greenhouses, creating secondary economic value and reducing overall energy waste. Participation is limited to companies registered in Karakalpakstan with functional electrical infrastructure and founders free of economic crime convictions. Applicants must obtain resident status and operational permits from the National Agency for Perspective Projects before commencing mining activities.
The initiative reflects Uzbekistan's broader recalibration of cryptocurrency policy. In January 2026, the nation introduced a special legal regime designating stablecoins as official means of payment, signaling institutional acceptance of digital assets. Besqala Mining Valley extends this framework by creating a dedicated investment corridor targeting regional economic development while leveraging the country's hydroelectric capacity and emerging renewable energy infrastructure to compete for global mining operations seeking jurisdictional certainty and green energy compliance.
The zone's fiscal structure replaces traditional corporate taxation with a fixed 1% monthly revenue fee paid to zone administration, creating predictable operating costs for miners. Standard electricity pricing is set at 1,800 soms per kWh for Group II consumers, though projects representing investments exceeding $100 million receive preferential tariff treatment. Miners gain unrestricted rights to sell cryptocurrency on both domestic and international exchanges or through direct transactions, with revenues freely credited to Uzbek bank accounts. This operational flexibility addresses previous regulatory constraints that limited trading to state-licensed service providers.
Energy infrastructure forms a core competitive advantage, with the zone powered by a unified grid incorporating renewable and hydrogen energy sources. The design allows mining operators to redirect excess thermal output to heat agricultural greenhouses, creating secondary economic value and reducing overall energy waste. Participation is limited to companies registered in Karakalpakstan with functional electrical infrastructure and founders free of economic crime convictions. Applicants must obtain resident status and operational permits from the National Agency for Perspective Projects before commencing mining activities.
The initiative reflects Uzbekistan's broader recalibration of cryptocurrency policy. In January 2026, the nation introduced a special legal regime designating stablecoins as official means of payment, signaling institutional acceptance of digital assets. Besqala Mining Valley extends this framework by creating a dedicated investment corridor targeting regional economic development while leveraging the country's hydroelectric capacity and emerging renewable energy infrastructure to compete for global mining operations seeking jurisdictional certainty and green energy compliance.
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