Uzbekistan has rolled out an ambitious plan to attract crypto miners by designating Karakalpakstan, a region covering about 40% of the country’s territory, as a special tax-free mining zone. The government promises no taxes on corporate income, property, land, and VAT until 2035, with only a minimal 1% fee on monthly earnings.
The move was sealed by President Shavkat Mirziyoyev’s decree in April 2026, and rules became operational by July. The mining zone is tightly regulated. Miners must be registered locally, preventing foreign companies from simply entering without establishing a local presence. Energy sources allowed include the national grid at higher rates, renewables, and even hydrogen, all under strict supervision.
Control and Oversight in Besqala Mining Valley
A special directorate within Karakalpakstan’s government manages daily operations, while the National Agency for Perspective Projects handles permits. Every mining operation must connect to the ASKUE system, giving authorities instant access to real-time energy consumption and output data. also crypto revenues must flow through Uzbekistan’s banking system, integrating mining profits into the financial infrastructure.
Karakalpakstan itself is a remote and underdeveloped area, making it an ideal base for such a large-scale mining experiment. However, no mining companies have officially started operations there yet, so the real impact is still to be seen. This initiative positions Uzbekistan as a formidable player in global crypto mining.
This article is for informational purposes and does not constitute financial advice.
