Abkhazia lifted two-year ban on Bitcoin mining, moves to regulate the sector

Abkhazia, the self-governing but disputed territory of only 245,000 people sandwiched between Russia and Georgia, has lifted its two-year ban on cryptocurrency mining. The ban went into effect in December 2018 after a surge in mining activity left the region facing an energy crisis.

Now, the government is moving to regulate the industry in an effort to flush out illegal miners and to control the amount of electricity used in bitcoin mining. According to the official website of the Abkhaz cabinet, the new plan will include regulation by the Ministry of Economy and a two-month moratorium on the import of cryptocurrency mining equipment.

Interestingly, while mining was illegal, the import of crypto-mining hardware into Abkhazia was not. A senior customs official revealed that approximately $ 600,000 worth of mining rigs were imported into the territory between January and July this year. This means that mining continued to thrive under the ban.

Over the next 60 days, the Ministry of Economy will develop a legal and regulatory framework for crypto mining, including an office to collect and analyze statistics and provide licenses. The state utility “Chernomoenergo” determines the amount of electricity used by miners, including prices.

Electricity prices in Abkhazia are relatively cheaper than in most countries. Consumers pay the equivalent of $ 0.05 per kilowatt-hour of electricity, which has caused huge numbers of miners to flock to the region, once a hub for tourism before the conflicts between Russia, Georgia and the United States. ‘Abkhazia to self-government. Georgia claims control over the country.

“This temporary procedure for the regulation of cryptocurrency mining activities establishes legal and organizational and technical rules for the implementation of cryptocurrency mining activities on the territory of the Republic of Abkhazia, which are generally binding,” the government said on its website. web.

The underground economy of bitcoin mining has grown so much that, in September, the power grid was once again close to failure. To avoid a total energy collapse, the government of Abkhazia decided it would be best to legalize and regulate mining, according to reports. It is unclear how much electricity is consumed by crypto mining.

What do you think of Abkhazia lifting its ban on bitcoin mining? Let us know in the comments section below.

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