The area allows approved companies to mine digital assets and sell them on domestic and international platforms, with all proceeds channeled back through Uzbekistan's banking system. Mining enterprises can enjoy tax exemptions until January 1, 2035, while being required to pay a fee of 1% of their mining income monthly.
Uzbekistan has opened the Beshkala Mining Valley.
The new framework creates a regulated environment for approved mining companies, allowing them to operate legally, sell mined digital assets, and repatriate all proceeds through Uzbekistan's banking system.
The area is open to registered legal entities wishing to engage in cryptocurrency mining activities. Companies can apply for residency through a new authority established under the Cabinet of Ministers of Karakalpakstan.
A major highlight of the decree is that miners can sell their crypto assets not only on Uzbekistan's national exchange but also on foreign platforms and through direct contracts. They can also exchange mined assets for other liquid cryptocurrencies. However, the government has imposed strict financial controls, requiring all crypto sales revenue to be transferred to bank accounts in Uzbekistan.
To make the area more attractive to investors, the government has introduced significant tax incentives. Mining companies operating in the Beshkala Mining Valley will receive tax exemptions until January 1, 2035, in return for paying a monthly fee equivalent to 1% of their mining income to the area's authority. Relevant departments have also been instructed to prepare amendments to the national tax law within two months, suggesting that further regulatory updates may be forthcoming.
This policy is part of Uzbekistan's strategy to stimulate investment in Karakalpakstan through special economic zones, an area facing high poverty levels and limited industrial growth.
This also marks a significant shift in the country's policy regarding cryptocurrency mining. In 2023, mining enterprises were required to rely solely on solar energy. The new rules are more flexible, allowing operators to combine renewable energy, hydrogen, and grid electricity, although grid-based consumption will be subject to higher electricity prices.