Uzbekistan becomes more crypto-friendly with launch of dedicated mining zone
Uzbekistan has created a state-controlled zone for cryptocurrency mining. The new model allows approved companies to sell mined digital assets on foreign platforms, while requiring all proceeds to be routed through domestic bank accounts.
According to local media, the relevant resolution was signed on April 17, and a decree launching the Besqala Mining Valley came into force on April 20. The zone covers the territory of the Republic of Karakalpakstan. Only registered legal entities will be allowed to operate there, obtaining resident status through a newly established directorate under the republic’s Council of Ministers.
Residents of the zone will be able to mine cryptocurrencies, use various energy sources, and sell their assets both on domestic exchanges and international platforms. Direct deals and swaps into other liquid crypto assets are also permitted. However, financial flows remain tightly controlled: all proceeds must be transferred to bank accounts within Uzbekistan.
Authorities have also introduced tax incentives. Mining companies operating in the zone will be exempt from taxes until January 1, 2035. In return, they must pay a monthly fee equal to 1% of their mining revenue to the zone’s directorate. The government has also been instructed to draft amendments to the tax code within two months.
The country needs investment
This move fits into Uzbekistan’s broader strategy to attract investment to Karakalpakstan, a region with high poverty levels and limited industrial development. Authorities have previously used special economic zones there to stimulate growth.
The new decree also softens the country’s earlier stance on mining. In 2023, Uzbekistan’s National Agency for Perspective Projects required mining operations to rely solely on solar energy. Now the rules are more flexible: within the special zone, companies can use renewable sources, hydrogen, and even grid electricity, though higher tariffs apply to grid usage.
The mining initiative complements other investment policies in the region. In late 2025, Uzbekistan launched a separate tax-free zone for artificial intelligence and data center projects. Foreign investors were offered tax breaks and discounted electricity, while companies investing $100 million or more were granted full tax and duty exemptions until 2040. The government expects this AI zone to attract over $1 billion in foreign investment by 2030.
Kazakhstan has taken a different path
At the same time, Uzbekistan is in many ways following the path of Kazakhstan, which was once a global leader in crypto mining. After China banned mining in 2021, Kazakhstan absorbed a large share of global hash power. However, due to pressure on its energy system, tighter regulations, and rising tariffs, the country gradually lost its position, with many miners relocating elsewhere.
Kazakhstan is now focusing on tighter control and centralization of the industry. Authorities have begun consolidating crypto companies and infrastructure within regulated zones, increasing licensing requirements and pushing operations toward local platforms. In this context, Uzbekistan’s approach looks similar: creating a dedicated mining zone with strict control over financial flows may be an attempt to learn from Kazakhstan’s experience and avoid the same pitfalls.
It is worth noting that Central Asia is steadily moving toward the legalization of cryptocurrencies under strong state oversight.
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