Abkhazia’s administration is in talks with Russia to resolve a dispute that resulted in a cryptocurrency mining ban. The partially recognized South Caucasus republic is now planning to formalize the business and obtain sufficient power from its energy-rich northern neighbor.
Abkhazia wants to make cryptocurrency mining easier.
The Autonomous Republic of Abkhazia, located in northwestern Georgia, is in talks with the Russian Federation about obtaining power to meet its demands. The negotiations also encompass those in the energy-intensive crypto mining business.
Despite a temporary mining ban enacted in 2018, the activity is said to have pushed the country to the edge of an energy catastrophe last year, prompting regulators to prolong the ban until March 2022. For the illicit use of electrical power to manufacture digital currency, fines and criminal liability was established, and a number of mining companies were shut down.
At a press conference this week, Abkhazia’s Minister of Economy and Deputy Prime Minister Christina Ozgan disclosed that officials in Sokhumi are now working to create legal circumstances for bitcoin miners to operate. According to Apsnypress, officials intend to manage Russia’s electrical supply and set up sites where miners can place their equipment.
According to Ozgan, Russian representatives have already visited the republic to discuss the technical aspects of the accord, and the Abkhaz government has received a draft agreement. She underlined that the crypto mining crackdown was primarily due to electrical shortages.
According to Chernomorenergo, a local power distribution firm, the overall capacity of mining equipment operating in the republic in 2020 will be at least 40 to 45 megawatts. The hardware may consume roughly 400 million kilowatt hours of electricity per year when fully loaded, which accounts for a significant chunk of the country’s deficit.
Before mining equipment imports were prohibited, Christina Ozgan reported that more than 66,000 mining devices had been delivered to Abkhazia. Authorities will now approve a new electricity pricing for bitcoin miners in order to encourage them to pay their bills, she added.
Abkhazia wants cryptocurrency mining plants to be able to connect to the power grid legitimately. The government also plans to restrict the relationship between mining companies and state-owned power company.