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The Abkhazian government is negotiating with Russia to resolve the issues that led to the ban on cryptocurrency mining. The republic, which is partially recognized in the South Caucasus, is now planning to legalize the industry and obtain sufficient electricity from its energy-rich northern neighbors.
The Autonomous Republic of Abkhazia in northwestern Georgia is negotiating with the Russian Federation on the supply of electricity to meet its needs. According to Forklog, the negotiations also covered those energy-intensive crypto mining industries.
Although a temporary mining ban was imposed in 2018, the activity allegedly pushed the country to the brink of an energy crisis last year, forcing regulators to extend the restrictions until March 2022. Fines and criminal liabilities were imposed on illegal use of electricity to mint digital currency, and some mining operations were shut down.
Abkhazia Minister of Economy and Deputy Prime Minister Christina Ozgan revealed at a press conference this week that Sukhumi officials are now trying to create conditions for the legal operation of cryptocurrency miners. Apsnypress quoted her as saying that the authorities plan to organize the supply of electricity from Russia and establish facilities where miners can install equipment.
Ozgan told reporters that Russian representatives have visited the republic to clarify the technical aspects of the transaction, and the Abkhazian government has received a draft agreement. She emphasized that power shortage is the main reason for the crackdown on crypto mining.
According to estimates by the local power distribution company Chernomorenergo, the total capacity of mining equipment operating in the Republic will be at least 40 to 45 MW by 2020. When fully loaded, the hardware can burn about 400 million kilowatt-hours of electricity each year, which constitutes 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 the import of mining equipment was stopped. She added that the authorities will now approve new electricity bills for cryptocurrency miners and encourage them to pay their bills.
Abkhazia hopes that the encrypted mine will be connected to the power grid. The government also intends to regulate the interaction between mining entities and state-owned power companies.
Do you think Abkhazia can be a friendly destination for cryptocurrency miners? Tell us in the comments section below.
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