Uzbekistan has established a state-regulated cryptocurrency mining zone named "Beskala Mining Valley" in the Republic of Karakalpakstan, effective April 20, 2025. This area allows registered companies to mine cryptocurrencies, sell them on foreign platforms, and utilize various power sources, with all profits required to flow into local bank accounts.
This establishment marks a significant shift in Uzbekistan's mining regulations, which previously only permitted the use of solar energy. The new zone allows for the use of renewable energy, hydrogen energy, and grid electricity, although the costs for grid usage are higher.
The tax exemption policy for this zone will last until January 1, 2035, with miners required to pay a monthly fee equivalent to 1% of their mining income to the regional administration. Officials will submit a draft amendment to the national tax law within two months.
Karakalpakstan is the largest administrative region in Uzbekistan but has a low level of development. A 2025 report from the United Nations Development Programme noted that the region has a high poverty rate and limited industrial development. The government hopes to use this special zone as a testing ground for investment incentives, having already established a tax-free zone for artificial intelligence and data center projects in November 2025. Foreign companies investing $100 million or more in this AI zone will enjoy full tax and tariff exemptions until 2040. Uzbekistan expects this AI zone to attract over $1 billion in foreign investment by 2030.
Uzbekistan's cryptocurrency policy began in 2018 when a presidential decree legalized cryptocurrency trading. However, in December 2019, a government ban restricted residents from purchasing cryptocurrencies, which was later lifted during the reconstruction of the regulatory framework.
By April 2022, the current president, Shavkat Mirziyoyev, established a new regulatory body—the National Projects Agency (NAPP)—and required all exchanges, mining pools, and custodians operating domestically to register locally. A decree in 2022 mandated that miners could only use solar energy, with grid users required to pay double the standard electricity rate.
As of January 1, 2023, residents could only buy and sell cryptocurrencies through licensed domestic exchanges, with foreign platforms blocked. NAPP has gradually strengthened enforcement, and in April 2024, Uzbekistan introduced criminal penalties for illegal cryptocurrency activities, including unlicensed mining, with severe violators facing up to five years in prison.
Despite the mining regulations in place since 2023, no legal crypto farms had been registered domestically in the years following the introduction of the relevant licensing framework. The first mining license in Uzbekistan was issued in February 2026 to a private company named NexaGrid, nearly two and a half years after the rules were established.
The new zone will change this situation, as Beskala Mining Valley addresses several issues within the original framework. The requirement for solar-only power has effectively hindered...