Under a presidential resolution signed on April 17, Uzbekistan has created a special cryptocurrency mining zone across Karakalpakstan and launched a supervised framework that allows approved mining companies to sell mined digital assets on foreign platforms while keeping the proceeds within the domestic banking system.
The Presidential Decree, effective April 20, creates a special mining zone “Beskala Mining Valley” throughout the Republic of Karakalpakstan, where registered legal entities can carry out virtual currency mining, use various power sources and apply for residency status through the new Directorate General of the Council of Ministers of the Republic.
The framework gives miners in the zone the right to sell crypto assets acquired through mining on domestic crypto exchanges or foreign platforms, including through direct contracts, and exchange them for other liquid crypto assets. Still, the opening comes with strict controls over how mining proceeds pass through the financial system, with proceeds from its sale having to be transferred to bank accounts in Uzbekistan.
Tax cuts aimed at attracting miners
The Decree also provides for tax exemption until January 1, 2035, while requiring monthly fees equal to 1% of revenues from mining activities to be paid to the regional directorate. The resolution also instructs authorities to submit a draft amendment to Uzbekistan’s tax law within two months.
The new decree builds on Uzbekistan’s recent use of special zone incentives in Karakalpakstan to attract investment to a region described in the 2025 United Nations Development Program report as having high poverty rates and limited industrial development.
The new framework also adjusts Uzbekistan’s previous approach to cryptocurrency mining. In 2023, the Uzbekistan National Prospective Projects Agency (NAPP) issued a decree on licensing crypto mining operations, obliging companies to use only solar power for mining digital assets.
The new decree will allow a wider mix of power sources within the zone, including renewable energy, hydrogen and grid electricity, with higher tariffs applicable to grid use.
Related: Uzbekistan raises cryptocurrency management fees
Uzbekistan expands special zone strategy to attract investment
The move also fits into Karakalpakstan’s broader investment strategy. A November 2025 Reuters report said the government had created separate tax-free zones for artificial intelligence and data center projects and offered electricity discounts and tax exemptions to attract foreign investors.
Under the initiative, foreign companies investing more than $100 million will be exempt from taxes and duties until 2040. According to the report, Uzbekistan expects to attract more than $1 billion in foreign investment by 2030 through AI special zone projects.
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