- Uzbekistan launches mining zone with tax breaks attracting global crypto firms
- New policy allows miners global sales but keeps funds domestically controlled
- 2035 tax exemptions and 1% fees reshape Uzbekistan crypto mining landscape
Uzbekistan has launched a new crypto mining zone offering tax exemptions lasting until 2035 to attract investors. Authorities introduced the framework through a presidential decree targeting economic growth in Karakalpakstan. The initiative establishes the Besqala Mining Valley, where licensed firms can mine digital assets under regulated conditions. Companies in the zone can sell mined crypto on domestic and foreign platforms. However, all proceeds must return to Uzbekistan through local bank accounts.
Moreover, firms must register as legal entities and secure resident status within the zone before operations begin. A dedicated directorate under the regional Council of Ministers supervises approvals, compliance, and activity monitoring. Additionally, the updated framework expands energy options for mining companies. Earlier rules required 100% solar power usage, but operators can now use renewable, hydrogen, and grid electricity. However, grid usage carries higher tariffs to manage energy demand.
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Tax incentives and 1% fee structure shape mining expansion
The decree grants tax exemptions until 01/01/2035, creating a long-term incentive for foreign and domestic investors. At the same time, operators must pay a monthly fee equal to 1% of mining income to the zone’s directorate. Besides these incentives, authorities have ordered amendments to the national tax code within 2 months. This step aims to align existing fiscal policies with the new mining framework.
Significantly, the project targets economic development in Karakalpakstan, a region facing structural challenges. A 2025 United Nations Development Programme report highlighted high poverty rates and limited industrial activity. Consequently, Uzbekistan has expanded special economic zones to attract large-scale investments. Previous initiatives include AI and data center zones offering tax relief and discounted electricity.
Strict banking rules maintain control over crypto revenues
According to a Reuters report from 11/2025, Uzbekistan expects to attract over $1B in foreign investment by 2030 through its AI zone strategy. However, authorities continue to enforce strict financial controls within the mining sector. All revenues from crypto sales must remain within Uzbekistan’s banking system to ensure oversight.
Moreover, miners can access global liquidity through foreign platforms while remaining under national supervision. This approach balances market flexibility with regulatory control. In conclusion, Uzbekistan’s mining zone combines tax relief until 2035 with a 1% revenue fee, aiming to attract investment while maintaining financial discipline.
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