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Regulation

Abkhazia to lift ban on crypto mining

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The de facto state of Abkhazia threw the towel on its fight against crypto mining, with the president recently announcing measures to lift the nation’s current ban. 

According to Finanz.ru, Aslan Bzhania stated on Thursday that his government plans to introduce “the most optimal mechanism” to regulate crypto mining, rather than maintaining the state’s current prohibition on blockchain-related activities.

Earlier this week, Ruslan Kvarchia, director of operational and technological management of the state’s official energy company, pointed to crypto mining as a major driver behind the current energy crisis affecting Abkhazia.

Commenting on this situation, Bzhania said:

“Now we are working on accounting and identifying the points where these mines are installed, it will not be possible to hide anything. (…) A government decree is being prepared, which will outline the most optimal mechanisms to regulate this process. We will not prohibit it [mining], the state will regulate it properly. This is also the first stage in solving energy problems.”

Bzhania said “it’s not easy,” when asked how he plans to bring the country’s power system back to normal levels. He added that even with the proper framework, it will likely take up to six months to solve the crisis.

As reported by Cointelegraph in July, Abkhazia had witnessed a surge in crypto mining activities in 2020, despite crypto-related activities being illegal since 2018. Customs have reported that mining hardware worth over $589,000 has crossed the nation’s border over the past six months.



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Regulation

New York authorizes first Yen stablecoin operator in the US

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New York has given the first authorization to a stablecoin backed by the Japanese Yen to operate in the U.S.

Per a Dec. 29 announcement, the New York Department of Financial Services has granted Japanese firm GMO-Z.com a charter to handle U.S.D. and Yen-backed stablecoins in New York. 

Given New York’s status as a global center, the NYDFS is the most prominent state financial regulator in the U.S. It is also one of the most aggressive. A pass to operate in New York often opens up the rest of the country. 

GMO’s charter is as a limited liability trust company rather than a full bank, the principle difference being in authorization to handle deposits. While a stablecoin operator typically needs the ability to hold reserves of the pegged asset, GMO’s charter limits its rights to hold other kinds of deposits not central to its ability “to issue, administer, and redeem” its stablecoins. 

The right to issue such non-depository charters has been a bone of contention between state regulators like the NYDFS and national banking regulators in the U.S. 

GMO president and CEO Ken Nakamura said: “We’re breaking ground with our move to issue the first regulated JPY-pegged stablecoin, which many see as a safe haven asset.” 

The NYDFS recently made changes to its famous BitLicense, including a conditional format that buddies up newly licensed firms with existing licensees. The first conditional BitLicense went to PayPal, facilitating the launch of its new crypto services earlier this fall with the help of longstanding licensee Paxos.