Abkhazia the de facto state in the South Caucasus is becoming a hub for bitcoin and cryptocurrency mining activities. The data from customs reveals from the past six months year 2020 is witnessing the rapid surge in importing crypto gears.
During 2018, the Abkhazian government banned cryptocurrency-related activities including mining, and reasoned that the country’s electric power system is not strong enough to support the crypto industry and required for the population of Abkhazia at priority. However, in 2019, a draft bill was introduced by the Ministry of Economy to regulate activities in the field of cryptocurrency mining in Abkhazia which hasn’t passed by the parliament so far.
Reportedly, the crypto mining pursuits are still on the go. In 2019, the customs payments came from the import of cryptocurrency equipment was about $41,858.46 (3 million rubles).
In the last six months, over $5,86,000 (42 million rubles) worth of consignments of crypto equipment is being noticed by customs committee at the Psou checkpoint (the border) in the Republic of Abkhazia.
So far, from the start of 2020, Abkhazia has earned over $84,100 in taxes just by importing crypto mining devices.
Interestingly, despite the crypto ban, the import of cryptocurrency mining devices is still legally permissible and by obligation, the importers need to pay customs fees about 1% of the hardware’s worth and a VAT of 10%. Nuzhnaya Gazeta reported while citing Guram Inapshba, the customs committee chairman of Abkhazia.
According to Inapshba, this is a strategic attempt by the government to catch the people involved in crypto-related affairs.
“It turns out that we launch them, and then start looking for them,” the head of the customs committee expresses his attitude to this absurd situation. Said, Inapshba.
“Several dozen citizens of our country are engaged in the import of crypto equipment into Abkhazia, whose names are not subject to disclosure following the law on commercial secrets. There are no foreigners among them.”