Uzbekistan has created the Besqala Mining Valley, a special zone for cryptocurrency mining. Learn how this new tax-free center will operate until 2035.
The government of Uzbekistan has taken another step in its strategy to integrate into the global digital asset market, with the creation of a cryptocurrency mining zone in Karakalpakstan. The measure was formalized through a presidential decree signed on April 17 and in force since April 20 of this year, with the aim of attracting foreign investment and boosting technological development in a region with significant economic challenges.
In this scenario, authorized companies will be able to mine and trade cryptocurrencies on international platforms. However, they will have to channel their income through the local banking system, a condition that strengthens financial control without hindering openness to the global digital ecosystem.
On the other hand, this decision expands the regulations that the country has been implementing since 2023, when the mandatory use of solar energy for digital mining was established. In this way, Uzbekistan is advancing a model that combines innovation, oversight, and sustainability within its crypto industry.
Trade digital assets on Bit2MeRegulated crypto mining in the new free trade zone
The new space, called Besqala Mining ValleyIt encompasses the entire Republic of Karakalpakstan and is designed to host cryptocurrency mining operations under strict state supervision. Companies registered in this area are authorized to mine digital assets, exchange them for more liquid cryptocurrencies, and settle them in both local and international markets, including peer-to-peer (P2P) transactions.
However, the framework does not propose a total deregulation of the cryptocurrency sector in the country. presidential decree It stipulates that the gross income generated by these activities must be repatriated to bank accounts within Uzbekistan.
This regulatory measure aims to safeguard financial transparency and ensure the traceability of capital flows linked to industrial mining. Furthermore, the Council of Ministers of Karakalpakstan has established a specialized Directorate to manage the administrative registration of companies, facilitating their establishment and expediting the transition to this new regulatory framework.
Uzbekistan seeks to attract crypto mining companies
One of the central elements of the initiative is the package of tax incentives. The decree establishes tax exemptions in effect until January 1, 2035These measures are aimed at attracting international companies and accelerating the development of the mining industry. As a condition, companies must pay a monthly fee equivalent to 1% of their revenue generated from this activity.
In line with this approach, the authorities have also ordered the drafting of tax code reforms within two months. This decision aims to update the legal framework and adapt it to the growth of the digital economy, a sector that is gaining increasing prominence globally.
The energy sector has also undergone significant changes. The new regulations supersede the 2023 rules issued by the National Agency for Prospective Projects, which mandated the exclusive use of solar energy. Now, the use of other energy sources is permitted. combined use of different energy sourcesThis includes renewable energy and electricity from the national grid, although the latter will be more expensive. Even so, this increased flexibility aims to ensure greater operational stability without hindering the sector's expansion.
Create your account and access crypto todayThe economic strategy in Karakalpakstan
Finally, the opening of the Besqala Mining Valley is part of a national strategy to revitalize the Republic of Karakalpakstan, which has historically lagged behind and had limited industrial development. In fact, according to Reports published by the United Nations Development Programme (UNDP)This border region urgently requires large-scale investments to combat its poverty rates.
The creation of the new cryptocurrency free zone also aligns with the technological vision being promoted by Uzbekistan from its capital. The government has designed an attractive framework for projects related to digital infrastructure and artificial intelligence, especially large-scale ones. The conditions are particularly competitive, with energy and tax benefits that extend for several decades.
In summary, cryptocurrency mining is integrated as another piece of an expanding ecosystem. The combination of incentives, infrastructure, and regulatory stability creates an environment where technology and digital production advance in a coordinated manner, strengthening the country's position on the global technological map.
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