Victor Ugochukwu · Dec 14, 2020 . 5min read
Republic of Abkhazia Plans to Legalize Crypto Mining
Abkhazia plans to regulate crypto mining rather than banning it. It has prohibited crypto mining in 2019 owing to electricity crisis.
By Komal Joshi · Sep 21, 2020 . 6min read
The President of Abkhazia, Aslan Bzhania, has designated that the nation will lift its de facto ban on crypto mining. The government has recently disclosed that it is contemplating introducing a more commendatory regulatory mechanism for digital currency mining in the country, instead of banning them entirely.
The Republic of Abkhazia prohibited cryptocurrency mining in the country about two years ago. It announced that the electricity system was not harmonious with the activities. However, the number of crypto farms in the country is growing. However, most of them operate illegally while exercising a heavy load on the power grid. Notwithstanding a ban on crypto mining in the country, it was still allowed to import mining equipment, which supported in flourishing the trade. According to the country’s custom’s head, Abkhazia allows importing crypto mining rigs as a trap to catch illegal miners.
According to President Aslan, they are recently acting on accounting and recognizing the mines’ points. He says that it is impossible to conceal anything. He further elucidates that it will roll out a government decree to outline the most optimal mechanisms to regulate this process. Additionally, he elaborates that the government will not ban but will regulate crypto mining properly.
Abkhazia Falls Prey to Electricity Crisis
The central tendency for crypto miners is not the regulatory framework. Amongst miners, the source of attraction continues to be the abnormally cheap electricity rates. Abkhazia gained its independence in 1999. Since then it has been suffering from a national electricity crisis due to a surge in crypto mining farms in the Republic. The President recognizes that even with the ban’s lifting, the country will still need up to six months for the electricity levels to get back to an average level.
With the current movement to legalize crypto mining, Abkhazia will accompany the increasing number of countries returning to the activity to expand their economies. Nevertheless, most countries are still fighting with the high expenditure on electricity due to mining.
Kazakhstan unveiled plans that investors would introduce over $700 million. It would help to turn the nation into a crypto mining hub. Earlier, the federal government of Kazakhstan imposed a 15% flat-rate tax on crypto mining. The proposition intends to utilize any funds raised through the tax to manage the nation’s COVID-19 emergency.
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