Uzbekistan Opens Besqala Mining Valley With Tax Breaks to 2035

A presidential decree published this week on the government legal portal establishes the Besqala Mining Valley in the Republic of Karakalpakstan. The decree, signed by President Shavkat Mirziyoyev, exempts income from cryptocurrency mining in the zone from taxation until Jan. 1, 2035 and requires firms to hold licenses from the National Agency for Prospective Projects (NAPP).

The zone is in northwest Uzbekistan bordering Kazakhstan. The decree guarantees resident mining companies unimpeded access to Uzbekistan’s unified power grid and provides for additional electricity to come from hydrogen power plants to serve mining operations. Firms operating in Besqala are allowed to sell mined digital assets on domestic and international trading platforms.

Companies must apply to the Besqala directorate to obtain resident status. Licensed activity in the valley will be overseen by NAPP, and the decree lists other incentives for enterprises based in the special economic zone.

The choice of Karakalpakstan places the valley next to a region that previously drew large numbers of miners. Kazakhstan accounted for roughly 13% of the global Bitcoin hashrate before changes to power pricing and regulation reduced its share. Neighboring countries have adjusted policies in response to energy constraints: Kyrgyzstan halted mining operations over power shortages before indicating a possible restart, and Turkmenistan legalized crypto mining and trading in January.

Uzbekistan has moved to regulate the sector in recent months. In February, authorities issued the country’s first official mining permit to a local firm planning facilities in the Bukhara region. NAPP adopted mining permit regulations more than two years earlier and acknowledged that no legal crypto farms were registered under the previous framework.

Regulatory limits remain in place. Retail cryptocurrency payments are still banned in Uzbekistan, though the use of stablecoins for settlements has been approved this year. Mining companies in Besqala may trade coins on exchanges but will operate under the licensing and oversight provisions set by NAPP and the valley directorate.

The decree sets out tax exemptions and infrastructure access for miners operating in Besqala through Jan. 1, 2035.