Uzbekistan signed a presidential resolution on April 17 to establish a supervised crypto mining zone in Karakalpakstan. This framework allows approved mining companies to operate within designated areas, sell mined digital assets on foreign platforms, and retain sales revenue within Uzbekistan's banking system.
The new mining zone sets operational rules, while the decree imposes strict controls on revenue flows. Companies must transfer the proceeds from crypto sales to Uzbek bank accounts, even if the sales occur abroad, ensuring that funds remain within the local financial system.
Additionally, the decree provides tax exemptions for residents of the mining zone until January 1, 2035. In return, companies are required to pay a monthly fee equivalent to 1% of their mining revenue to the mining zone administration. Officials must also submit proposed tax law amendments within two months to align the rules with the new system.
This initiative appears aimed at enhancing the region's attractiveness to investors. Karakalpakstan remains a focal point for investment efforts, with development reports indicating high poverty levels and limited industrial growth in the area.
Electricity Rules Expanded to Multiple Energy Sources
Under the new decree, residents of the mining zone can utilize a broader range of electricity sources, including renewable energy, hydrogen, and grid power, although miners using grid power will face higher electricity prices. Furthermore, the mining zone aligns with Karakalpakstan's broader economic strategy. By 2025, the government also plans to create a tax-free zone in the same area specifically for artificial intelligence and data center projects.
This early plan offers discounted electricity and tax incentives to foreign investors. Reports indicate that companies investing at least $100 million can receive comprehensive tax and duty exemptions until 2040, with the national goal of attracting over $1 billion in foreign investment from this project by 2030.