Uzbekistan Launches 'Besqala Mining Valley' to Attract Global Crypto Miners

Uzbekistan has officially launched the 'Besqala Mining Valley,' a supervised crypto mining zone located in the Republic of Karakalpakstan. Established via a presidential decree effective April 20, the zone provides a regulated framework for approved mining entities to operate and monetize digital assets. The move represents a strategic shift in Uzbekistan's approach to digital assets, moving away from a strict solar-only power requirement established in 2023. By diversifying allowed energy sources and offering tax breaks, the government seeks to revitalize Karakalpakstan, a region previously identified by the United Nations as having high poverty rates and limited industrial development. Registered companies within the zone are permitted to sell mined assets on both national and foreign exchanges, including through direct contracts. However, the state maintains strict financial oversight, requiring all proceeds from these sales to be routed through bank accounts located within Uzbekistan. Financial incentives are a cornerstone of the decree, which grants tax exemptions until January 1, 2035. In exchange, operators must pay a monthly fee equal to 1% of their mining income to the zone's directorate. Energy options have also been expanded to include a mix of grid electricity, hydrogen, and renewables, though higher tariffs will be applied to grid usage. This initiative complements a separate tax-free zone for artificial intelligence and data centers, where foreign investments exceeding $100 million receive full tax and duty exemptions until 2040. Together, these zones are part of a broader national effort to attract over $1 billion in foreign investment by 2030.