Uzbekistan has created a special crypto mining zone across Karakalpakstan under a presidential resolution, establishing a supervised framework that lets approved mining companies sell mined digital assets on foreign platforms while keeping proceeds inside the country’s banking system.
A presidential decree effective Monday establishes the “Besqala Mining Valley,” a special mining zone across the Republic of Karakalpakstan. Registered legal entities can carry out crypto mining, use a mix of power sources and apply for resident status through a new directorate under the republic’s Council of Ministers.
Miners in the zone may sell crypto assets obtained through mining on national crypto exchanges or foreign platforms, including via direct contracts, and may exchange them for other liquid crypto assets. However, the framework imposes strict controls on how mining revenues flow through the financial system: proceeds from those sales must be transferred to bank accounts in Uzbekistan.
To attract operators, the decree provides a tax exemption through Jan. 1, 2035, while requiring miners to pay a monthly fee equal to 1% of income from mining activity to the zone’s directorate. Officials have been instructed to submit draft amendments to Uzbekistan’s tax code within two months.
The move builds on Uzbekistan’s use of special-zone incentives in Karakalpakstan to draw investment into a region that a 2025 United Nations Development Programme report described as having high poverty rates and limited industrial development.
The new framework also adjusts Uzbekistan’s prior approach to crypto mining. In 2023, the National Agency for Perspective Projects issued rules requiring firms to use only solar power. The Besqala decree allows a wider mix of power sources within the zone, including renewable sources, hydrogen and grid electricity, with higher tariffs applied for grid usage.
The mining zone aligns with a broader strategy to expand special economic zones in Karakalpakstan. In November 2025, the government set up a separate tax-free zone for artificial intelligence and data center projects, offering discounted electricity and tax exemptions to attract foreign investment. Under that initiative, foreign firms investing $100 million or more receive full tax and duty exemptions until 2040; authorities expect the AI zone to draw over $1 billion in foreign investment by 2030.
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