Cryptocurrency mining banned in Abkhazia
CONTENT

  • Abkhazia re-introduces a ban on cryptocurrency mining

  • In addition to the ban on the mining of cryptocurrencies, a restriction on the import of mining equipment is also introduced.

  • Last time tightening almost put the republic on the brink of an energy crisis

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The Cabinet of Ministers of Abkhazia adopted a resolution to again prohibit activities related to the mining of cryptocurrencies on the territory of the republic

Abkhazia again introduces a ban on cryptocurrency mining. According to the decree of the Cabinet of Ministers of the Republic, the extraction of digital assets is prohibited until June 1, 2021.

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In addition to the prohibition on mining itself, the import of equipment necessary for the extraction of cryptocurrencies also falls under the restrictions. The ban comes into force on December 20, 2020. According to the Deputy Prime Minister and Minister of Economy of Abkhazia Christina Ozgan, all mining farms on the territory of the republic should be turned off, regardless of the owner of the cryptocurrency farm..

Forward to the past

This is not the first time that mining of virtual assets is prohibited in Abkhazia. For the first time, the Cabinet of Ministers of Abkhazia decided to ban cryptocurrency mining in the republic back in December 2018. Then the decision with the ban was explained by the critical state of electrical networks due to the load from the shadow miners..

However, in October 2020, Abkhazia decided to legalize cryptocurrency mining due to the harmful effects of prohibitive rhetoric. According to Ruslan Kvarchia, Director for Operational and Technological Management of Chernomorenergo, the ban on mining had the opposite effect:

“The decree prohibited connecting equipment to the networks of Chernomorenergo, but did not prohibit importing it into the territory of Abkhazia.

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As a result, the energy company was left face to face with the problem of an uncontrolled increase in connected illegal capacities “.

It is noteworthy that for the period of temporary legalization, the Ministry of Economy of Abkhazia even reported on the successful registration of 65 cryptocurrency mining centers in the national register.

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Now, the republic has decided to radically approach the restrictions, banning both mining and the import of relevant equipment. It remains to be seen how much the introduced restrictions will help, given that last time prohibitive rhetoric led to the growth of the shadow market..

Recall that at the end of September 2020, mining in Abkhazia grew to such a scale that the republic was on the verge of an energy crisis.

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Cryptocurrency mining banned in Abkhazia

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