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The establishment of free economic zones that foster blockchain and cryptocurrency adoption in Armenia is bearing fruit as a local mining operator adds 60MW of capacity to its power plant-based facility.
Cryptocurrency investment platform ECOS has been operating a mining center on the grounds of the Hrazdan Power Plant since 2018. Situated in the country's center, the utility is becoming an innovation hub that is taking advantage of attractive financial benefits and direct access to power.
The establishment of the mining facility is the result of a partnership between the Armenian government and ECOS established back in 2018, which charged the company with the development of the free economic zone (FEZ) aimed at making use of the power facility as a hub for data centers and cryptocurrency mining.
The agreement between the operator and the Armenian government cites the promotion of direct foreign investment and creation of products and services within the Information Technology sector.
Cointelegraph spoke to ECOS marketing manager Anna Komashko following the upgrade to its mining operation in Hrazdan in August. She unpacked the four-year journey to date, explaining that the Armenian government ‘positions itself as the country of blockchain.’ This statement is reflected by the attractive tax benefits that are afforded to companies looking to operate in the FEZ, as Komashko explained:
“The main aim of FEZ was to help attract and develop high technologies in the country, help blockchain and crypto startups, so specific beneficial conditions are applied to them.”
The marketing manager confirmed the special tax conditions enjoyed by businesses operating at the Hrazdan site, with no taxes imposed for VAT, import and export customs duties or taxes on property and real estate. The project's longevity is backed by a 25-year agreement for an uninterrupted electric supply.
The infrastructure at the site includes a data center, service center and warehousing for equipment and spare parts. Seven shipping containers make up the data center, housing around 250 mining units. ECOS acquires its miners directly from Chinese manufacturer Bitmain. The firm’s cloud mining service has around 258,000 users, while it also sells and services equipment to clients.
China’s high-profile crackdown on cryptocurrency mining saw a shift in the geolocational distribution of the Bitcoin hashrate, making sites offering cheap power or tax incentives highly sought after.
Situated at the Hrazdan power plant, the mining facility gets its electricity supply directly from the high-voltage grid and uses the site's infrastructure to power containers. Komashko also noted that ECOS could expand to an additional 200MW of clean and affordable electricity. The area is well-suited for cryptocurrency mining, settled in a mountainous region of Armenia with an annual average temperature of 4.8°C.