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Abkhazia to lift ban on crypto mining

Abkhazia will allow cryptocurrency mining ...

Abkhazia will allow cryptocurrency mining after two years of ban
CONTENT

  • Abkhazia decides to legalize cryptocurrency mining due to the harmful effects of prohibitive rhetoric

  • A two-month ban on the import of mining equipment has been introduced in the republic

  • A similar prohibitive course is being worked out in Russia.

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The government of Abkhazia decided to legalize the cryptocurrency mining market two years after the ban, which put the republic on the brink of an energy crisis

Abkhazia re-enters the cryptocurrency mining market two years after the ban. This was reported on the official website of the Cabinet of Ministers of the Republic of Abkhazia. The decree on measures to regulate the mining of cryptocurrencies announced a two-month restriction on the import of mining equipment into the republic..

During the same period, the Ministry of Economy of the Republic of Abkhazia should develop and submit a draft law with a regulatory and legal definition of cryptocurrency mining, establish a conceptual framework and attribute this activity to licensed types. Also, the state enterprise “Chernomorenergo” will determine the parameters of the permissible power consumption of electricity with a limit on the total limit for mining.

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Recall that in December 2018, the Cabinet of Ministers of Abkhazia decided to prohibit the mining of cryptocurrencies in the republic due to the need, first of all, to provide the population with electricity..

Reverse effect

It is noteworthy that, according to Ruslan Kvarchiy, Director for Operational and Technological Management of Chernomorenergo, the ban had the exact opposite effect:

“The decree forbade connecting equipment to the networks of Chernomorenergo, but did not prohibit importing it into the territory of Abkhazia. As a result, the energy company was left face to face with the problem of an uncontrolled increase in connected illegal capacities “.

At the same time, the Deputy Prime Minister and Minister of Economy of Abkhazia Kristina Ozgan said that it is the power engineers who “better than anyone” know who is engaged in illegal activities in the extraction of cryptocurrencies.

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The growth of mining activity in the republic was also reported by the chairman of Sberbank of Abkhazia Georgy Abukhba. In July, Abukhba said that the bitcoins earned by mining “are converted into other currencies, for example, into the ruble, transferred to Russian cards and cashed out at ATMs in Abkhazia”.

Shadow mining in Abkhazia has grown to such a scale that at the end of September the republic found itself on the verge of an energy crisis. To avoid a potential collapse of the electricity market, the authorities decided to take the path of market legalization.

Feeling deja vu

Abkhazia will allow cryptocurrency mining ...

A similar prohibitive rhetoric is observed in Russia. According to the new amendments to the draft law “On digital financial assets” introduced by the Ministry of Finance of the Russian Federation, cryptocurrency miners will not be able to make a profit in digital assets.

At the same time, experts from the analytical firm Xangle Research drew attention to how the legalization of cryptocurrencies in Russia will affect the development of cryptocurrency mining. According to analysts, Russia has a number of advantages, including a climate suitable for installing equipment, cheap electricity and free land..

Recall, according to the adopted bill, from January 1, 2021, a new financial instrument in the Russian Federation has been legalized. At the same time, the use of cryptocurrencies as a means of settlements in the country is prohibited..

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