Uzbekistan has made an important move towards attracting investments into its new special crypto mining zone, establishing a designated area in the Republic of Karakalpakstan for this purpose. Presidential Decree No. ПҚ-143, signed on April 17, 2026, establishes the “Besqala Mining Valley” zone across the entire territory of Karakalpakstan.
Key Provisions of the Special Mining Zone
The Special Crypto Mining Zone has many unusual benefits and obligations:
- Tax Exemption: Income received from mining is not subject to taxation or other compulsory contributions until January 1st, 2035.
- Fee on Monthly Income: The amount of income received from mining (before any expenses) is subject to a fee to the Special Mining Zone Directorate, equal to 1% of total monthly income. After deducting the fees, the remaining, or net profit, will betransferred to the Karakalpakstan republic budget.
- Use of Renewable Energy: This is required for all miners; solar photovoltaic energy systems are specifically referenced. Miners may connect to the unified national electricity supply network at a price which is equal to twice thenational standard rate (with exceptions for AI development).
- Crypto Sales: Miners will be permitted to sell major mined crypto in Uzbekistan on regulated national crypto exchanges, international exchanges, or through other direct contracts. Sales made outside of Uzbekistan will not reduce the total sales revenue that will be deposited in bank accounts in the country.
- Residency: A mining operation is required to be legally registered in the Special Mining Zone, operate at the same address as it is registered, and comply with the individual electricity metering unit requirements at the location that they are registered.
Miners are not allowed to mine anonymously or use previously issued crypto (i.e., assets that are being traded) as a means of payment; they are also allowed to use waste heat created from their mining equipment to operate a greenhouse located on agricultural land.
Why It’s Important For the Industry
Uzbekistan has committed to being a player in the crypto mining industry that is actively competing with Russia, Kyrgyzstan, Turkmenistan, and Kazakhstan for investment, by developing a special crypto mining zone that includes both incentives (tax holidays and access to renewable energy) as well as controls (income from coins must be sent back through an Uzbek bank and double the rates for electricity supplied through the grid).
Moving Forward
An Agency of Uzbekistan will provide a framework for granting permits to prospective crypto miners. The management team at this new special crypto mining zone will perform all the functions of registering individuals who want to mine and writing all necessary requirements within a two-month time frame that correspond to the regulations and tax code of Uzbekistan
