Uzbekistan has formally launched the Besqala Mining Valley in Karakalpakstan under a presidential resolution signed on April 17 and effective from April 20, creating a state-backed special zone designed specifically for cryptocurrency mining. The project is meant to do more than attract miners: it is a bid to bring mining activity inside a tightly supervised legal and financial framework while making the country more competitive in Central Asia’s hashpower market.
The zone’s headline incentive is a long tax holiday. Companies operating in Besqala are being offered exemptions on mining-related taxes until January 1, 2035, while paying a monthly management fee equal to 1% of revenue instead of the usual tax burden. That structure gives miners unusual fiscal visibility, but it also makes clear that Uzbekistan wants a predictable revenue share and direct oversight rather than a loosely regulated free-for-all. Authorities are also requiring that proceeds from mined crypto sold on local or overseas exchanges be routed into domestic bank accounts, ensuring that cash flows remain visible inside the national financial system.
Access Is Open Only to Approved Local Operators
The valley is not open to anonymous or lightly structured market entrants. Only locally registered legal entities can apply, and applicants must have approved power infrastructure, pass a formal residency process and satisfy fit-and-proper requirements for responsible personnel. Uzbekistan is clearly trying to attract scale, but only on terms that keep licensing, ownership and operational accountability under state control. A new directorate under the regional authorities and an oversight role for the National Agency for Perspective Projects, which continues to formalize the sector through licensing and permitting.
Cheap Power and Green Branding Are Central to the Pitch
Energy policy sits at the heart of the offer. The decree-linked reporting says electricity in the zone is priced at 1,800 som per kilowatt-hour, with preferential treatment available for projects investing more than $100 million, while the broader energy mix will combine grid access with renewable and hydrogen-linked supply. That gives Besqala its real commercial edge: Uzbekistan is not just offering tax breaks, but trying to package power access, cost certainty and green-mining branding into one industrial proposition. The government wants waste heat from mining operations to support greenhouse and agricultural uses, reinforcing the effort to market the zone as a more sustainable model rather than a purely extractive one.
The strategic ambition behind Besqala is large. Reports tied to the new regime say the government hopes the zone will help attract more than $1 billion in foreign investment by 2030 and generate jobs in a region where industrial development has lagged. But the decisive question is not whether the incentives look generous on paper; it is whether major miners accept the repatriation rules, licensing filters and state visibility that come with them. If they do, Uzbekistan could emerge as a more serious regional mining destination. If they do not, Besqala may end up demonstrating that generous tax treatment alone is not enough when capital wants both cheap power and operational autonomy.