Uzbekistan Launches Besqala Mining Valley for Crypto Growth

Uzbekistan introduces the Besqala Mining Valley, offering 0% corporate tax for crypto miners until 2035 alongside strict regulatory oversight.

The measure, which took effect on April 20, offers long-term tax incentives for crypto mining while combining these benefits with strict regulatory control over financial flows.

Controlled Liberalization of the Crypto Sector

The new framework allows licensed companies to mine and sell cryptocurrencies on both domestic and international platforms. Assets like Bitcoin can be sold freely, provided all proceeds pass through the Uzbek banking system.

Despite aggressive tax incentives—including a full exemption from corporate income tax until January 1, 2035—the government is ensuring a steady cash flow to the budget through a mandatory 1% monthly fee on total mining revenue. This effectively creates a model where the sector is exempt from traditional taxation but remains tied to regular state payments.

Oversight will be managed by the National Agency for Perspective Projects, which will issue licenses and control access to the zone. The regulator holds expanded powers, including the ability to deny permits based on reputational risks or questionable information regarding applicants.

Energy at the Heart of the Strategy

The energy model is a cornerstone of the project. Moving away from previous restrictions that mandated the use of solar energy, the new framework allows for a more flexible approach.

Companies can utilize the national power grid at higher rates, while the implementation of alternative sources, including hydrogen technologies and renewable energy, is encouraged.

The concept of a “circular economy” is also gaining attention—excess heat from mining facilities can be repurposed to heat greenhouses and agricultural projects, adding further value to these investments.

Investor Screening and Risk Mitigation

Uzbekistan is implementing rigorous requirements for participants in the zone. All companies must be locally registered, and their ultimate beneficiaries and management are subject to detailed background checks for links to financial crimes or money laundering.

A new “reasonable discretion” mechanism grants the regulator the right to refuse a license even if formal conditions are met, should there be doubts regarding transparency or the origin of capital.

An Investment Magnet with Long-Term Goals

The creation of the “Besqala Mining Valley” is part of a broader strategy to transform Karakalpakstan into a technological and energy hub. The government is offering additional incentives for projects with investments exceeding $100 million, aiming to attract significant foreign capital.

This initiative builds upon previous programs for developing data centers and artificial intelligence, which target up to $1 billion in investments by the end of the decade.

Balancing Incentives and Control

By combining tax breaks with stringent financial oversight, Uzbekistan is positioning itself as an attractive yet controlled destination for crypto mining. The model clearly reveals the country’s ambition to draw the industry in without losing grip on capital flows and regulatory stability.

In the global race for crypto infrastructure, the “Besqala Mining Valley” represents an attempt to establish a new type of regulatory environment—a zone that offers both growth incentives and a framework for long-term sustainability.