Uzbekistan is establishing a dedicated crypto mining zone in Karakalpakstan, creating a regulated environment for mining operations supported by renewable energy and long-term tax incentives.

The initiative is aimed at attracting investment, developing digital infrastructure and expanding the country’s crypto ecosystem.

Creation of a specialized mining zone

 

A new special mining zone “Besqala Mining Valley” is being created with a dedicated управляющая структура responsible for:

• registration and administration of residents;
• coordination with regulators;
• facilitation of mining activity approvals.

Entities must obtain resident status and regulatory permission to operate within the zone.

Access to energy and infrastructure

 

Residents are granted access to:

• the unified national electricity system;
• renewable energy sources, including solar, wind and hydrogen-based energy;
• dedicated infrastructure for large-scale mining operations.

The framework explicitly promotes the use of alternative energy sources for mining activities.

Crypto operations and monetization

 

Mining operators are allowed to:

• sell mined crypto-assets through licensed domestic exchanges or foreign platforms;
• enter into direct agreements for disposal of crypto-assets;
• exchange mined assets into other liquid crypto-assets.

At the same time, regulatory oversight remains in place to ensure compliance with national crypto regulations.

Innovative use of excess energy

 

The framework allows:

• use of thermal energy generated from mining for agricultural purposes, including greenhouse operations.

This introduces an efficiency model linking digital infrastructure with the agricultural sector.

Tax incentives and investment appeal

 

To стимулировать investment:

• income from mining activities is exempt from taxes and mandatory payments until 1 January 2035.

This long-term incentive significantly enhances the attractiveness of the zone for investors and operators.

Regulatory and compliance requirements

 

The regime includes strict compliance conditions:

• only registered legal entities may participate;
• activities must be conducted at designated locations;
• compliance with AML/CFT requirements is mandatory;
• individuals with certain risk profiles are restricted from participation.

In addition:

• anonymous mining and anonymous crypto-assets are prohibited;
• full transparency of operations and ownership is required.

Operational and technical requirements

 

Mining activities must meet:

• technical and safety standards;
• energy consumption monitoring and separate metering;
• requirements for connection to power infrastructure.

Electricity usage is subject to specific tariff structures, particularly where renewable energy or grid capacity is involved.

Implications

 

The creation of the mining zone has several implications:

• crypto businesses gain access to a regulated and incentivized environment;
• investors benefit from long-term tax exemptions and infrastructure support;
• the energy sector sees increased integration with digital industries;
• regulators maintain control through licensing and compliance mechanisms.

The creation of “Besqala Mining Valley” positions the country as a potential regional hub for compliant and energy-efficient mining operations.