Uzbekistan Establishes Tax-Exempt Special Zone for Cryptocurrency Mining

Uzbekistan's President Shavkat Mirziyoyev signed a decree on April 20 establishing the country's first dedicated cryptocurrency mining zone, dubbed the "Besqala Mining Valley," located in the autonomous republic of Karakalpakstan in the country's northwest ^[1].

Companies operating within the zone will be exempt from taxes and fees on mining income until January 1, 2035, though they must remit 1% of monthly revenues to the state. Firms are permitted to use all forms of renewable energy as well as hydrogen power, but will still face double the standard electricity tariffs if drawing from the national grid ^[1].

Mined crypto assets may be legally sold or exchanged on both domestic and foreign platforms, provided all proceeds are processed through Uzbek banks. Operations without registration or identity disclosure are prohibited, and participants will face strict anti-money laundering oversight ^[1].

In a notable sustainability provision, companies are allowed to construct greenhouses on agricultural land, using excess heat generated by mining equipment for heating purposes ^[1].

The government has indicated it intends to expand the special zone model to additional regions. Industry representatives report existing interest from international investors based in the United States, Saudi Arabia, and China. Uzbekistan's share of global Bitcoin hashrate currently stands between 0.09% and 0.125%, figures the new framework aims to significantly improve ^[1].