Business

Dennis Wafula

Abkhazia energy companies call for regulations

A state-run energy company in Abkhazia is calling for the proper regulation of crypto mining in the country as the winter draws near. The company is seeking regulation to avoid a power shortage during the winter.

According to reports, there are many cryptocurrency mining firms in the country that are consuming a lot of energy. These crypto mining firms have set up in abandoned Soviet factories. The electricity company fears that if the mining companies continue using the same amount of energy, residents will face a fatal blackout. 

Energy is already scarce in the country, and the additional load created by the companies doesn’t help it. In addition, it will be hard to generate the current amount of energy with winter approaching.

Aslan Basaria, the head of Chernomorenergo, a state-run energy firm stated:

Cryptocurrency mining is putting additional load on our grid, the transmission lines, and substations that are loaded to capacity even without it. If temperatures fall, there is a risk that electricity will not reach regular customers.”

Chernomorenergo is now set on regulation. The company wants authorities in the country to come up with regulations that will control energy consumption for the mining companies. If there is no state intervention, the country could be affected by the power shortages.

Currently, most of the energy consumed in Abkhazia comes from Georgia, the country it broke from 18 years ago. Electricity is cheap in the country, which has caused miners to eye the region but at the expense of the people living there. Miners are also eyeing the Abkhazia because not a lot of countries recognize the existence of the country and this creates a chance to mine in a secluded region.

The call for regulation comes at a time when the cryptocurrency market is struggling to stay afloat. Many crypto mining firms have been forced to shut down with the few remaining struggling to meet their targets. Others have resulted in shutting off their mining machines until the crypto market becomes favorable.

Creating regulation for the crypto miners in Abkhazia could be the end of some of their operations. So far, the county is just at the drafting stage for a proposed law.

Note: Tokens on the Bitcoin Core (SegWit) chain are referenced as SegWitCoin BTC coins. Altcoins, which value privacy, anonymity, and distance from government intervention, are referenced as dark coins.

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