Uzbekistan Launches Tax-Advantaged Special Zone for Bitcoin Mining
Uzbekistan has taken a significant step in the cryptocurrency sector by establishing a tax-advantaged special zone for Bitcoin mining, known as the "Besqala Mining Valley." This initiative, signed into law by President Shavkat Mirziyoyev on April 20, aims to attract investment and promote the use of renewable energy sources in mining operations.
Since 2018, Uzbekistan has maintained a cautious approach to regulating the mining industry. Initially, the country recognized digital assets and established a legal framework for cryptocurrencies and mining, albeit with strict regulations. Mining was only permitted for legal entities, and individuals were prohibited from mining officially. Miners were required to register with the National Agency for Perspective Projects and adhere to stringent operational standards.
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“Mining is only allowed for legal entities, and individuals are not permitted to mine officially,” stated the regulatory framework established in 2018.
Despite these regulations, Uzbekistan's share of the Bitcoin hashrate remained low, fluctuating between 0.02% and 0.1% from October 2019 to January 2022. The government has actively combated illegal mining operations, discovering 91 illegal mining farms in the energy-rich Bukhara region in 2024.
In response to regulatory changes in neighboring Kazakhstan and the increasing interest in cryptocurrency, Uzbekistan relaxed its mining regulations in April 2022, launching pilot projects for crypto innovations. However, these initiatives did not specifically target mining but rather aimed to create a more favorable environment for technological advancements.
As of October 2023, the National Agency for Perspective Projects introduced a mining licensing system, with the first official license granted in January 2026 for a solar-powered facility operated by NexaGrid in the Bukhara region. Additionally, in March 2026, the government announced a nationwide 15% reduction in electricity costs for mining and AI data centers, a move that could significantly enhance the attractiveness of Uzbekistan as a mining destination.
| Year | Hashrate Share |
|---|---|
| 2019-2022 | 0.02% - 0.1% |
| 2025 | 0.09% - 0.125% |
The Besqala Mining Valley offers several incentives for registered mining companies, including a tax exemption on mining income until January 1, 2035, and the ability to utilize various renewable energy sources. However, companies must pay double the standard electricity rates when using the national grid and are required to contribute 1% of their monthly earnings to the state.
International investors from the USA, Saudi Arabia, and China have already expressed interest in mining projects within Uzbekistan. The government is also considering expanding the special zone model to other regions, indicating a strategic move to position Uzbekistan as an attractive hub for cryptocurrency mining under strict state control.
In summary, Uzbekistan's establishment of the Besqala Mining Valley represents a significant shift in its approach to cryptocurrency mining, aiming to balance regulation with economic opportunity while promoting renewable energy usage.
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