The Abkhazian government is negotiating with Russia to resolve an issue that led to a ban on cryptocurrency mining. The partially recognized republic in the South Caucasus is now planning to legalize industry and obtain sufficient electricity from its high-energy northern neighbor.
Abkhazia wants to create conditions for mining cryptocurrencies
The autonomous republic of Abkhazia in northwest Georgia is holding talks with the Russian Federation about the electricity supply to meet its needs. Those in the energy-hungry crypto mining sector will also be caught in the negotiations, Forklog reported.
Despite a temporary mining ban introduced in 2018, the country is said to have brought the country to the brink of an energy crisis last year, forcing regulators to extend the restrictions until March 2022. Fines and criminal liability were introduced for the illegal use of electricity for digital coinage, currencies and a number of mining operations were closed.
Officials in Sokhumi are now trying to create conditions for the legal operation of cryptocurrency miners, Abkhazia’s Minister of Economic Affairs and Deputy Prime Minister Christina Özgan announced at a press conference this week. Quoted by Apsnypress, she said the authorities plan to organize the electricity supply from Russia and establish facilities for miners to install their equipment.
Russian officials have already visited the republic to clarify the technical side of the deal and the Abkhaz government has received a draft contract, Ozgan told reporters. She stressed that power shortages were the main reason for crypto mining crackdown.
According to estimates by the local power company Chernomorenergo, the total capacity of mining machines operated in the republic in 2020 was at least 40 to 45 megawatts. At full load, the hardware can consume around 400 million kilowatt hours of electricity annually, which accounts for a large part of the country’s deficit.
Christina Ozgan also announced that more than 66,000 mining equipment had been shipped to Abkhazia before imports of mining equipment ceased. She added that authorities will now approve a new electricity tariff for cryptocurrency miners and encourage them to pay their bills.
Abkhazia wants crypto mining farms to be legally connected to the power grid. The government also intends to regulate the interaction between mining companies and the state energy supplier.
Do you think Abkhazia can become a friendly destination for cryptocurrency miners? Let us know in the comments section below.
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