Uzbekistan is setting up a crypto mining valley with tax exemption as the government moves to strengthen its position in the digital asset industry.
Authorities have announced the creation of a dedicated mining zone designed to attract both domestic and international firms.
The initiative reflects a broader policy shift as Tashkent opens its economy to regulated cryptocurrency activity.
Tax incentives and infrastructure plans
The new special economic zone, known as the Besqala Mining Valley, will be located in the autonomous Republic of Karakalpakstan near the border with Kazakhstan.
The project was approved through a decree signed by President Shavkat Mirziyoyev and published on the government’s legal portal.
Crypto mining companies operating in the zone will benefit from a tax exemption that runs until January 1, 2035.
This incentive is expected to lower operational costs and make the region competitive within Central Asia. In addition, licensed miners will be allowed to trade their digital assets on both local and international exchanges.
Authorities have also pledged reliable access to electricity through Uzbekistan’s unified power grid.
The energy mix will increasingly rely on renewable sources, while hydrogen-powered plants under development in Karakalpakstan will supply additional capacity.
These measures are aimed at addressing one of the main challenges facing mining operations, which is consistent and affordable power.
Licensing framework and entry requirements
Companies seeking to operate in the Besqala Mining Valley must obtain licenses from the National Agency for Prospective Projects (NAPP).
The agency will oversee compliance and regulate activity within the zone. Applicants are required to submit documentation to the valley’s administrative directorate to gain resident status.
The move follows earlier regulatory steps taken by Uzbekistan to formalize the crypto mining sector.
In February, the country issued its first official mining permit to NexaGrid, a local firm planning to build facilities in the Bukhara region.
The approval marked a shift from previous uncertainty, as no legal mining farms had been registered despite existing regulations.
Regional competition and market outlook
Uzbekistan’s initiative comes amid growing competition among Central Asian countries for crypto mining investment.
Kazakhstan, once a leading global hub, lost ground after raising electricity tariffs to manage power shortages linked to mining activity. The country has since adjusted its policies to regain investor interest.
Kyrgyzstan temporarily suspended mining operations due to energy constraints, but has signaled a return to the sector as conditions improve.
Turkmenistan has also entered the market after legalizing crypto mining and trading earlier this year.
While Uzbekistan still prohibits crypto payments, it has taken steps to allow stablecoin use for certain transactions.
The establishment of the mining valley highlights the government’s intent to expand its role in the digital asset space while maintaining regulatory oversight.
As regional dynamics evolve, Uzbekistan is positioning itself as a competitive destination for mining operations.
