The Abkhazian government resumed discussions with Russia to find a solution to the issues that caused the prohibition of crypto mining. The region is looking into the digital asset industry and has revealed plans to remove the ban and create a sufficient power source to promote crypto mining. The government will collaborate with Russia to ensure sufficient supply of power.
This is a necessary step to help the industry get adequate energy to mine digital assets while ensuring that the region has power for its citizens. The partially recognized state faced power outages, which experts linked to the growing mining activities in the autonomous state. There are sources reporting the republic’s move to remove the crypto mining ban.
Abkhazia To Remove Crypto Mining Ban
The government explained that crypto miners would also benefit from the negotiation with Russia. The republic announced a temporary crypto mining prohibition in 2018, which it planned to remove provided the country has sufficient power. However, sources revealed that the mining activities worsened the power crisis in the state, pushing authorities to extend the prohibition to 2022.
With current changes, there are reports suggesting that Abkhazia will lift the ban by 2022, pushing the growth of digital asset mining in the republic. The region made stringent regulations after its power crisis by levying fines and arresting miners who violated the prohibition law. This made many crypto-related businesses leave the area for more crypto-friendly countries.
The state’s authorities are looking into making crypto mining legal, which was revealed by the Minister of Economy, Christian Ozgan. Ozgan, who is also the Deputy Prime Minister, assured that the regulators would enable conditions for crypto mining to continue. She revealed that Russia’s collaboration would help miners have enough power to mine crypto and also setup their mining equipment. The Deputy Prime Minister shared how Russian representatives have been in the region to finalize the agreement, which could mean that mining activities would resume soon.
Crypto Mining Led To Abkhazia’s Power Crisis
She added that the prohibition was due to the inability of the republic to produce enough power to run, making it mandatory for regulators to stop the mining activities in Abkhazia. The region’s power distribution company, Chernomorenergo reported the increased usage of power consumption before the ban. It revealed that mining facilitates used a minimum of 40-45 megawatts last year. The company said that hardware burns up to 400 million Kw in a year. It faulted the huge consumption of power by mining companies as the reason for continuous power outages.
Ozgan explained that almost 70,000 mining equipment were imported into the region before it banned the importation of mining equipment. She assured that the tariff would be better, which would lead to regular payment of electricity bills. The state’s regulators announced the plans to regulate mining entities and state-owned utilities, which would regulate the usage of power by mining farms. Many countries have prohibited crypto mining due to the growing concerns associated with high energy consumption and carbon emission.