The unrecognized territory of Transnistria is reported to be seeking investment from Russian mining entrepreneurs to establish bitcoin mining farms, according to Russian news outlet Lenta. The report suggests that the territory hopes to enter the industrial cryptocurrency mining industry.
Also Read: Crypto Mining “More Profitable Than Drugs and Arms Trafficking” in Russia
Transnistria Is Hoping to Capitalize Upon Its Abundance of Cheap Power in Order to Attract Bitcoin Mining Investment
The Russian media outlet Lenta has published a report alleging that the tiny unrecognized territory of Transnistria is hoping to secure investment to establish bitcoin mining farms. Lenta reports that “the administration of [Transnistria] is considering the possibility of creating farms for the production of crypto-currency jointly with Russian investors.” The report quotes Russian businessmen and youngest son of Russia’s Prosecutor General, Igor Chaika, as stating that “in Transnistria, there are directions for cooperation in the field of information technologies, including blockade and crypto-currencies.” Lenta also attributed Chaika with confirming that the Transdniestrian government has made “legislative amendments” that allow “the production of cryptocurrency.”
Transnistria is hoping to capitalize upon its abundance of cheap power in order to attract mining investment. Lenta reports that “the [current] price of a kilowatt-hour… in Moscow… is 2.5 times higher” than in Transnistria, providing an incentive for Russian investors to set up operations in the unrecognized republic. The low cost of electricity owes itself to Transnistria receiving hydroelectric power from two major stations, combined with the republic’s small population of approximately half a million citizens. Chaika states that “the Transdniestrian government says they are already in fourth place in Europe in terms of speed and penetration of the Internet, they have very cheap electricity, and this is one of the key conditions for setting up farming farms.”
In 2016 Transnistria Announced That Its Central Bank Was Exploring Centrally Administered Applications for Cryptocurrency Technology
The unrecognized republic was established in the aftermath of the Transnistrian War, which escalated between 1990 and 1992 between pro-Moldavian and pro-Transnistrian forces. The conflict took place on the Ukrainian border of Moldavian Soviet Socialist Republic, with Transnistria seeking to align itself with Russia in response to growing nationalistic policies of Moldova. Although a ceasefire has held since 1992, Transnistria is regarded as an unrecognized but de facto independent republic. The republic’s dominant industries are steel production, electricity production, and textiles manufacturing.
In 2016, it was reported that Transnistria’s central bank was exploring the possibility of developing a national cryptocurrency that would be centrally administered, stating that virtual currencies have long been on the radar of Transnistria’s administration. According to the deputy head of the Republican Bank of Transnistria, “cryptocurrency is very convenient as a means of payment, as transactions are instantaneous and have nearly zero prime cost… the Republican Bank of Transnistria is currently studying possible options for a cryptocurrency”, adding that “it is quite likely that Transnistria’s cryptocurrency as a payment system… is a little ways down the road. After that, cryptocurrency will be able to act as a fiduciary money.”
Do you think that Transnistria will be successful in attracting investment from Russian bitcoin miners? Share your thoughts in the comments section below!
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