Cryptocurrency mining activities in Abkhazia are banned until March 2022, due to the increased load they generate on the electricity grid and the electricity shortage they cause.
Abkhazia President Aslan Bzhania revealed during a press conference that 6,000 mining machines had been seized.
The seized equipment is kept in a special warehouse, but according to some estimates there are about 30,000 more in operation in the country.
There is some time, the region has become an important cryptocurrency mining site, thanks to low electricity costs and virtually no taxes, which attracted many miners but caused constant problems with the power grid.
The country has long launched a fight against crypto mining to reduce electricity consumption, so that there are no longer large mining farms in the country. However, there are still many crypto miners, as the inhabitants themselves use mining as an alternative source of income.
Bzhania would like to legalize this business by creating a “technoparks” especially where miners could legally mine cryptocurrencies, but meanwhile authorized the police to seize the equipment en masse .
Energy production issues and the idea of conscious cryptocurrency mining in Abkhazia
Last Friday, during a meeting of the president of the council with the leaders, it was admitted that the fight against crypto mining in the country so far has not yielded tangible results.
The cryptocurrency mining process is, for all intents and purposes, a very energy-intensive activity and, for a country with electricity production and distribution problems, this could definitely aggravate the situation.
The government believes that, so far, mining is one of the main causes of the country’s growing electricity deficit.
The temporary ban was introduced in 2018, but has since been extended until March 31, 2022. Despite that, it doesn’t seem to be working.
According to energy engineer Pavel Maksimov, the reason for the ban’s failure is the difficulty of exercising real control over unauthorized miners, as inspectors are rarely able to locate them.
Given the failure of this policy, it is possible that not only will the actual incursions against miners continue, but the country will also decide to intensify them.
The government’s other line of approach to solving energy problems is to reach an agreement with neighboring Russia to receive additional electricity supplies to allow miners to legally explore. For now, however, that solution doesn’t seem to be on the way.