Uzbekistan sets up Beshkala Mining Valley in Karakalpakstan

Who can operate in the zone

Under the new arrangement, only legal entities registered in Karakalpakstan can qualify for resident status and work within the valley’s licensing regime. The project is aimed at attracting organized mining businesses rather than informal operators, with entry and operations handled through a specific regulatory framework.

A separate directorate will oversee the zone. Its responsibilities include reviewing applications, regulating mining activity, and helping shape broader development policy for the region. The setup places mining under a centralized administrative structure rather than leaving it to general business rules alone.

Power, sales and banking rules

The Beshkala Mining Valley is designed to give residents access to several energy sources. Operators are allowed to use electricity from the national grid, renewable energy and hydrogen-based generation. The inclusion of multiple power options suggests the zone is meant to support different mining models while fitting into wider energy planning.

Miners in the zone are allowed to sell crypto through licensed exchanges or convert it into other liquid assets. At the same time, the rules require that profits from those sales be transferred to bank accounts in Uzbekistan. That requirement is intended to keep mining-related revenue inside the country’s financial system and under official oversight, even as operators retain access to international crypto markets.

Tax incentives and operating costs

The new regime includes a long tax holiday for mining income. Revenue from mining is exempt from taxes and mandatory payments until Jan. 1, 2035. However, residents will still have to make a monthly payment equal to 1% of mining income to the valley’s directorate.

That structure gives miners a substantial incentive to establish themselves in the zone, while also creating a recurring revenue stream for the body charged with managing it.

Regional development plans

The mining valley is also tied to broader development goals for Karakalpakstan. Beyond digital asset production, the plan includes using excess heat from mining operations for greenhouse farming on agricultural land. This links the project to a wider vision of industrial and agricultural efficiency rather than treating mining as a stand-alone activity.

More broadly, the initiative forms part of a larger effort to promote technology projects and attract investment into the region. By combining licensing, power access, tax relief and administrative oversight in a single zone, Uzbekistan is positioning Karakalpakstan as a dedicated hub for regulated crypto mining and related infrastructure.

The Beshkala Mining Valley therefore appears to serve both as a digital asset policy experiment and as a regional development tool, with the government seeking to channel mining income through domestic institutions while using the sector to support investment and growth in Karakalpakstan.