Uzbekistan has created a particular crypto mining zone throughout Karakalpakstan below a presidential decision signed on April 17, opening a supervised framework that lets permitted mining firms promote mined digital property on overseas platforms whereas protecting the proceeds contained in the nation’s banking system.
A presidential decree efficient April 20 creates the “Besqala Mining Valley,” a particular mining zone throughout the Republic of Karakalpakstan, the place registered authorized entities can perform crypto mining, use a mixture of energy sources and apply for resident standing by way of a brand new directorate below the republic’s Council of Ministers.
The framework provides miners within the zone the precise to promote crypto property obtained by way of mining on nationwide crypto exchanges or overseas platforms, together with by way of direct contracts, and to alternate them for different liquid crypto property. Nonetheless, the opening comes with strict controls over how mining revenues transfer by way of the monetary system, and proceeds from these gross sales have to be transferred to financial institution accounts in Uzbekistan.
Tax breaks intention to lure miners
The decree additionally gives for a tax exemption by way of Jan. 1, 2035, whereas requiring them to pay a month-to-month charge equal to 1% of revenue from mining exercise to the zone’s directorate. The decision individually instructs officers to submit draft amendments to Uzbekistan’s tax code inside two months.
The brand new decree provides to Uzbekistan’s current use of special-zone incentives in Karakalpakstan to draw funding right into a area {that a} 2025 United Nations Growth Programme report described as having excessive poverty charges and restricted industrial growth.
The brand new framework additionally adjusts Uzbekistan’s earlier method to crypto mining. In 2023, Uzbekistan’s Nationwide Company for Perspective Tasks (NAPP) issued a decree on licensing crypto mining operations, requiring companies to solely use solar energy to mine digital property.
The brand new decree permits a wider mixture of energy sources throughout the zone, together with renewable, hydrogen and grid electrical energy, with increased tariffs utilized for grid utilization.
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The transfer additionally matches a broader funding technique in Karakalpakstan. In response to a Reuters report in November 2025, the federal government had established a separate tax-free zone for synthetic intelligence and information heart initiatives, providing discounted electrical energy and tax exemptions to attract overseas buyers.
Below the initiative, overseas companies investing $100 million or extra get full tax and responsibility exemptions till 2040. In response to the report, Uzbekistan expects to draw over $1 billion in overseas funding by 2030 from the AI particular zone mission.
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