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Construction has begun on three mining farms and three data centers in Karakalpakstan, located in the northwest of Uzbekistan. The total cost of the projects amounts to $5.11 billion.
Amanbay Orynbaev, Chairman of the Jookargy Kenes (Parliament) of the republic, explained that the entire territory of Karakalpakstan has been designated as a “special mining zone.”
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Recently, the “Nukus-2” wind power plant was commissioned in the region. Alongside it, another similar power plant is being constructed in partnership with the Saudi company ACWA Power, with a cost of $3.3 billion.
According to the rules for registering mining companies in Uzbekistan, cryptocurrency mining is permitted exclusively for legal entities and primarily using renewable energy sources. Using electricity from the country’s unified grid is allowed, but a double-rate multiplier is applied to the tariff, making mining economically unviable under those conditions.
The decision to establish the special mining zone was made in April. Authorities have permitted the sale or exchange of mined crypto assets through Uzbek and foreign cryptocurrency exchanges. Mining licenses are issued by the National Agency for Innovative Development (NAID). To obtain resident status, legal entities must submit an application to the specially created Besqala Mining Valley Directorate.
Currently, there are virtually no legal mining companies in Uzbekistan. The first NAID license was issued only in February to the private firm NexaGrid. The rules for issuing cryptocurrency mining licenses were approved by NAID in the autumn of 2023.
