Uzbekistan has unveiled a new initiative to boost its digital asset sector by launching a dedicated crypto mining zone with significant tax incentives. The project, known as Besqala Mining Valley, will be developed in Karakalpakstan, an autonomous region in the northwest of the country. Under a presidential decree issued by Shavkat Mirziyoyev, mining operations within the zone will be exempt from income tax until 2035. The move reflects a broader strategy to position Uzbekistan as a competitive destination for global crypto mining firms seeking cost efficiency and regulatory clarity.
The government aims to attract foreign and domestic investment while creating new employment opportunities in the region. Besqala Mining Valley is expected to operate as a specialized economic zone where companies can establish large scale mining facilities with reduced financial burdens. Although miners will benefit from tax exemptions, they will still be required to contribute 1 percent of their monthly income to the state. Authorities believe this balanced approach will generate steady public revenue while maintaining a favorable environment for business growth.
A key focus of the initiative is the use of renewable energy sources to power mining activities. The decree allows operators within the zone to utilize electricity generated from solar, wind and other sustainable resources, aligning with global trends toward greener crypto infrastructure. This approach is designed to reduce environmental impact while improving energy efficiency in a sector often criticized for high power consumption. By promoting renewable energy adoption, Uzbekistan is attempting to address sustainability concerns while strengthening its energy diversification strategy.
The framework also provides flexibility for miners to sell their digital assets both locally and on international exchanges. However, strict financial controls remain in place, as all proceeds from crypto sales must be transferred through banks operating within Uzbekistan. This requirement ensures oversight and compliance with national financial regulations, while also integrating crypto related revenues into the formal banking system. Officials view this as a way to maintain transparency and reduce risks associated with unregulated capital flows.
Uzbekistan has gradually expanded its digital asset policies in recent years, introducing licensing frameworks and regulatory measures aimed at legitimizing the industry. The creation of Besqala Mining Valley marks one of the most ambitious steps so far, signaling a shift toward large scale infrastructure development. The government is positioning the country as a regional hub for blockchain and mining operations, particularly as global firms search for jurisdictions offering stable rules and lower operational costs.
