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Abkhazia Set To Lift Crypto Mining Ban, Aiming Now For Regulation

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The de-facto state of Abkhazia has recently given up in its fight to completely prohibit crypto mining. Quite recently, the president of the nation, Aslan Bzhania, made it clear that measures will be taken place in order to lift the current crypto ban of the nation.

Shifting Gears To Combat Crypto

Finanz.ru, a media outlet, revealed that Bzhania stated on Thursday that his government is making plans to introduce a mechanism to regulate crypto mining in the country. This mechanism will be in contrast with the current prohibition the state has on blockchain-related activities.

Massive Energy Crisis Caused By Crypto Mining

It was earlier this week when the state’s official energy provider’s Director of Operational and Technological Management, Ruslan Kvarchia, highlighted how crypto mining was a major driver behind the energy crisis currently at hand within Abkhazia.

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Kvarchia stated that the mining equipment in operation within the republic is pulling a minimum of 40 to 45 megawatts of power. Subjecting this capacity to round-the-clock consumption throughout the year, and this amounts to around 400 million kilowatt-hours. This, Kvarchia stated, stands as one of the key factors for the power shortage in the country. Abkhazia is facing a projected power deficit of 704 million kilowatt-hours for the remaining months of 2020, as well.

Joining And Regulating Instead Of Banning

Abkhazia gave comment about the matter at large, explaining that his government is ard at work, both identifying and accounting these various points where crypto mines were installed.

He warned that it’s impossible to hide anything from them, as well. He explained that a government decree has already been prepared, set to outline the most “optimal mechanisms” in order to have this process fully regulated. Abkhazia stated that no illegal mining would be allowed, with the government planning on properly regulating it. This, Bzhania said, stands as the first step in solving the state’s energy crisis, as well.

When asked how he planned on bringing Abkhazia’s power grid back to normal levels, Bzhania frankly stated that it wouldn’t be an easy task. Even with a proper framework, the president stated that the task itself would take up to six months in order to solve the energy crisis.

Back in July, Abkhazia bore witness to an incredible surge of crypto mining activities in the state in 2020. However, crypto-related activities had been illegal in Abkhazia since 2018. The Customs of Abkhazia had reported that mining hardware, estimated to be worth $589,000, had crossed into the borders of the nation over those past six months.

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      A journalist, with experience in web journalism and marketing. Ali holds a master's degree in finance and enjoys writing about cryptocurrencies and fintech. Ali’s work has been published on a number of cryptocurrency publications.