Following in the footsteps of counterparts from former Soviet countries, government officials in Transnistria have attempted to create crypto-friendly environment in their disputed republic. Newly adopted legislation legalizes cryptocurrency mining and provides incentives for foreign investors. Entrepreneurs, invited to set up mining facilities, are not even required to register a local company. They can take advantage of tariff-free imports of mining equipment and unrestricted access to cheap energy.
Unrecognized Republic Recognizes Unregulated Mining
The parliament of the Pridnestrovian Moldavian Republic has just adopted a new law – “On the development of information blockchain-technologies”. Dedicated free economic zones (FEZ) will be created under its provisions. Foreign nationals and businesses dealing with crypto mining are welcome to reside and operate there without even having to register а local juridical entity.
“We consulted people who understand the technology and came to the conclusion that we need to build the legal and technological basis. So, that’s what we did – we created the regulatory framework”, PMR’s President Vadim Krasnoselsky said, quoted by Kommersant. The head of the unrecognized republic, which borders Moldova and Ukraine, has initiated the adoption of the new legislation.
Investors will enjoy preferential treatment. Residents of the FEZ areas will be able to import mining equipment free of any tariffs. Relocating property out of the zones will also be unimpeded by government restrictions. Pridnestrovian authorities promise “maximum assistance” in regards to providing access to the local electrical grid. Special rates may be offered by “natural monopolies” like the power generating companies.
Cryptocurrency mining is energy-intensive but Transnistria has no issues with that. “We are a country that generates electricity”, President Krasnoselsky said, insisting there is plenty of surplus energy to power mining operations. A 48,000 kW hydroelectric station on the Dniester River and a Russian owned Moldavian power plant can electrify mining farms. Three thermal power stations in the capital Tiraspol can also be used. They are running on natural gas supplied by “Gazprom,” and PMR is not paying anything for the “blue fuel”. The $6 billion USD debt is billed to Kishinev because of the ongoing negotiations about the status of Transnistria within Moldova. The republic can produce even more electricity if it burns some of the gas offered by Russia to cover transit fees.
Vadim Krasnoselsky admits that authorities are targeting Russian investors who have demonstrated interest in PMR as a mining destination. One of those potential business “immigrants” is the younger son of Russia’s Prosecutor General Yury Chaika. 30-year-old Igor is a well-known Russian entrepreneur and founder of a company that provides logistical support to Russian firms entering the Chinese market. He told Kommersant that Pridnestrovian authorities had promised to provide the infrastructure for the mining facilities. Projects to invest up to $250,000 USD there have been discussed with several other Russian businessmen. The price of electricity will play a key role when choosing between Transnistria, Moldova and Russia, Igor Chaika said…
Read Full: Another Post-Soviet Jurisdiction Welcomes Crypto Miners
