Uzbekistan has officially launched the Beshkala Mining Valley as a regulated cryptocurrency mining zone across the entire Republic of Karakalpakstan, according to reports from The Economic Times. Under a presidential resolution that took effect on April 20, the country has established a comprehensive framework for licensed mining companies to operate within the designated area. Only legal entities registered in Karakalpakstan qualify for resident status, with businesses required to first obtain resident status through the zone's directorate before applying for a crypto mining license issued under the supervision of the National Agency for Perspective Projects.
The mining valley provides licensed operators with multiple power sources including electricity from the national grid, renewable energy sources such as solar power, and hydrogen-based power generation, as reported by The Economic Times. This represents a significant expansion from Uzbekistan's previous mining policy introduced in October 2023, which largely limited activities to solar power generation. The updated framework allows approved residents to draw power from the unified electricity grid alongside renewable energy and hydrogen-based generation, providing operators with greater flexibility while maintaining the country's licensing requirements for crypto mining businesses.
The resolution exempts income earned from mining activities from taxes and mandatory payments until January 1, 2035, providing a significant financial incentive for companies considering investment in the zone, according to The Economic Times. However, residents must pay a monthly fee equal to 1% of mining income to the zone's directorate, even as they benefit from the tax exemptions. Additionally, mining companies must transfer revenue from crypto asset sales to bank accounts held in Uzbekistan, with proceeds from digital asset sales allowed through domestic exchanges, overseas trading platforms, direct contracts, or by exchanging for other liquid crypto assets.
The mining initiative includes reuse of excess heat generated by mining equipment for greenhouse farming on agricultural land, creating an additional use for energy produced during mining operations, as reported by The Economic Times. This sustainable development component aligns with the region's economic development plans and encourages more efficient use of renewable energy resources through regulated crypto mining projects. The framework is designed to keep mining-related revenue within the domestic banking system while allowing companies to access international cryptocurrency markets.
The creation of the Beshkala Mining Valley forms part of Uzbekistan's ongoing efforts to attract investment into Karakalpakstan, with the mining zone linked to improvements in regional living standards, according to The Economic Times. The initiative follows another technology-focused program launched in 2025, when Uzbekistan approved a separate tax-free zone for artificial intelligence and data center projects offering discounted electricity prices and tax incentives to foreign investors. Officials stated that the AI and data center project was designed to attract more than $1 billion in foreign investment by 2030, placing the new crypto mining zone within a series of long-term development initiatives targeting the region.
