Abkhazia in talks with Russia to secure electricity supply for cryptocurrency miners

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The government of Abkhazia is negotiating with Russia to resolve an issue that has led to the ban on cryptocurrency mining. The partially recognized South Caucasus republic is now considering legalizing industry and sourcing sufficient electricity from its energy-rich neighbor to the north.

Abkhazia wants to create conditions for cryptocurrency mining

The Autonomous Republic of Abkhazia in northwest Georgia is in talks with the Russian Federation on supplying electricity to meet its needs. Those in the energy-hungry crypto mining sector are also covered by the negotiations, Forklog reported.

Despite a temporary mining ban introduced in 2018, the activity reportedly drove the country to the brink of an energy crisis last year, forcing regulators to extend restrictions until March 2022. Fines and liability criminal offenses have been introduced for the illegal use of electric power to digital currency currencies and a number of mining operations have been closed.

Sokhoumi officials are now trying to create the conditions for cryptocurrency miners to operate legally, Abkhaz Economy Minister and Deputy Prime Minister Christina Ozgan revealed at a press conference this week. Quoted by Apsnypress, she indicated that the authorities plan to organize the supply of electricity from Russia and to set up facilities where miners can install their equipment.

Russian officials have already visited the republic to clarify the technical side of the deal, and the Abkhaz government has received a draft deal, Ozgan told reporters. She pointed out that power shortages were the main reason for the crackdown on crypto mining.

According to estimates by the local electricity distribution company, Chernomorenergo, the total capacity of mining equipment operating in the republic was at least 40 to 45 megawatts in 2020. When fully charged, the equipment can burn. about 400 million kilowatt-hours of electricity per year, which constitutes a large part of the country’s deficit.

Christina Ozgan also announced that more than 66,000 mining devices had been delivered to Abkhazia before the cessation of mining equipment imports. She added that authorities will now approve a new electricity tariff for cryptocurrency miners and encourage them to pay their bills.

Abkhazia wants cryptocurrency mining farms to be legally connected to the power grid. The government also intends to regulate the interaction between mining entities and the electric utility.

Do you think Abkhazia can become a friendly destination for cryptocurrency miners? Tell us in the comments section below.

Keywords in this story Abkhaz, Abkhazia, ban, crypto miners, crypto mining, deficit, Electricity, Energy, legalization, Miners, mining, Negotiations, power, Russia, Supply, Supply, talks

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