Key Takeaways
- Miners extracting digital currency utilize more than 2% of the total electricity consumed in the Russian Federation.
- According to a new government evaluation, the country’s industry ministry believes it is time to bring the business out of the shadows and regulate it.
- As per deputy minister, mining will use less electricity in the future as the industry moves toward less energy-intensive mining technologies.
- Russia ranks third after the United States and Kazakhstan in terms of bitcoin mining capability.
According to a latest government estimate, bitcoin miners now account for more than 2% of Russia’s electricity use. In light of this, the Ministry of Industry believes it is essential for the industry to emerge from the shadows and be regulated.
Miners of cryptocurrency use more electricity than Russian farmers.
“This is more than the cost of electricity for agriculture. In this sense, we cannot but recognize mining as an industry.”
Speaking at a forum scheduled by the ruling United Russia party
-Russia’s Deputy Minister of Industry and Trade Vasily Shpak
The government official highlighted during the event dedicated to the development of blockchain technology and the management and regulation of digital financial assets that cryptocurrency mining is now in the “grey zone,” where it is not taxed in any way and poses hazards to those involved. Shpak believes the sector is required to be more transparent for the government.
The deputy director of the Ministry of Industry and Trade believes, in the near future, less energy will most likely be spent on mining in aggregate, because the globe is shifting away from bitcoin’s present protocol in favour of other, less expensive protocols. However, it is self-evident that this is – computations, as they would consume energy in some way, and this is a technical activity. In this case, Federation’s view is clear: mining must be recognised, controlled, and integrated into industrial activity.
Early in April, Russian Prime Minister Mikhail Mishustin stated that the government agreed with the Central Bank’s position that cryptocurrencies cannot be used as a form of payment on Russian Federation territory, but that the development of cryptocurrency mining might be considered.
“We also believe that in order to boost investment, particularly in fixed assets, we may discuss mining problems, such as the building of data centres and associated infrastructure,” he added.
“We are opposed to the recognition of Bitcoin as a means of settlement or money,” Mishustin said.
According to a survey published in October of last year by the Cambridge Centre for Alternative Finance, Russia ranks third in terms of bitcoin mining capacity, behind the United States and Kazakhstan. The information was updated following the launch of a campaign in China to outlaw bitcoin mining.
Russian miners have been sanctioned as a result of western sanctions imposed in response to the invasion of Ukraine, denying the country the ability to avoid the limitations. This year, Russia’s contribution of the worldwide average monthly hashrate fell to 4.66 percent.
