The de facto state of Abkhazia announcing measures to lift the nation’s current crypto mining ban

Abkhazia, a de facto state in the South Caucasus, continues to face an energy crisis. The head of the region’s national energy provider recently blamed increased crypto mining activity for the problems. However, President Aslan Bzhania announced measures to lift the country’s crypto mining ban, instead of introducing “the most optimal mechanism” to regulate crypto mining.

abkhazia-announcing-measures-to-lift-the-nations-current-crypto-mining-ban

The head of the region’s national energy provider recently blamed increased crypto mining activity for the problems

Abkhazia has witnessed a surge in crypto mining activities in 2020, despite crypto-related activities being illegal since 2018. Customs have reported that mining hardware worth over $589,000 has crossed the nation’s border over the past six months.

According to Jam News, the government’s year-old ban on crypto mining has not been respected nor enforced by the local authorities. Miners continue to take advantage of the area’s low energy costs.

Ruslan Kvarchia, director of operational and technological management of Chernomorenergo, Abkhazia’s official energy company, stated:

“Total capacity of the mining equipment operating in the republic is at least 40–45 megawatts. This capacity, subject to round-the-clock consumption throughout the year, can consume about 400 million kilowatt-hours, which is the majority of the projected shortage of electricity in Abkhazia. The projected deficit for the remaining months of 2020 may amount to 704 million kilowatt-hours.”

However, instead of further tightening the screws on cryptocurrency miners, local officials think of a different solution.

Authorities are considering lifting the ban and allowing all cryptocurrency mining activities across the region

Allowing miners to operate in the light of day could, according to the government, improve communication between all parties involved: energy providers, miners, and the local authorities. The government believes that repealing the ban will allow for closer supervision of mining facilities and better control over the electricity supply.

According to Finanz.ru, Aslan Bzhania stated on Thursday that his government plans to introduce the most optimal mechanism to regulate crypto mining, rather than maintain its current prohibition on blockchain-related activities.

Earlier this week, Ruslan Kvarchia, director of operational and technological management of the state’s official energy company, pointed to crypto mining as a significant driver behind the current energy crisis affecting Abkhazia.

Commenting on this situation, Bzhania said:

“Now we are working on accounting and identifying the points where these mines are installed, and it will not be possible to hide anything. A government decree is being prepared, which will outline the most optimal mechanisms to regulate this process. We will not prohibit its mining; the state will regulate it properly. This is also the first stage in solving energy problems.”

Abkhazia had witnessed a surge in crypto mining activities in 2020, despite crypto-related activities being illegal since 2018. Customs have reported that mining hardware worth over $589,000 has crossed the nation’s border over the past six months.

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