Russian Province Ends Ban On Cryptocurrency Mining

The government of a Russian province has lifted a two-year ban on cryptocurrency mining. The ban came into effect when mining farms brought the region to the brink of an energy crisis.

The Republic of Abkhazia, a province in the Russian Federation, has rebooted its crypto mining glory. According to the region’s official cabinet website, the new system will include regulation by the finance ministry and a two-month restriction on the importation of mining equipment.

During this period, the Ministry of Economics plans to develop a system regulating cryptocurrency mining, including an office to collect and analyze statistics and provide licenses.

Likewise, the state power authority “Chernomoenergo” will set rules as to the amount of electricity used by these businesses.

Cabinet ministers prohibited mining in 2018 after farms threatened to use all of Abkhazia’s power. According to Jam news, Abkhazia became a Mecca of crypto mining because of the relatively low price of electricity. The business took up so much electricity, it threatened homes and stores with blackouts.

The director of Chernomorenrgo, Ruslan Kvarichiya, said that the ban had the opposite of the intended effect. Technically, the law forbade mining equipment to be hooked up to Chernomorenergo’s grids. It did not, however, ban importing equipment into the territory. In the end, local energy companies had to deal with an unchecked increase in new farms.

The vice prime minister and minister of economics said that electrical engineers, “know better than anyone else,” how crypto mining continued to grow under the ban, an apparent hint at corruption.

The shadow economy of Bitcoin mining grew so large that, in September, the power grid once again approached a breakdown. To prevent a total energy collapse, ministers decided it would be better to legalize and regulate mining.