Demand for Mining Equipment Drops in Russia Amid Fears of Possible Ban

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Key Takeaways:

  • According to Russian online marketplaces, Mining hardware is now more frequently offered than sought.
  • The trend began this month when the Central Bank of Russia (CBR) issued a consultation paper.
  • The regulator proposed a blanket ban on operations with cryptocurrencies, including mining, citing threats to financial stability and risks for investors.

According to Russian online marketplaces, Mining hardware is now more frequently offered than sought. This month, the trend began when the Central Bank of Russia (CBR) issued a consultation paper. The consultation paper included the proposal proposed by the regulator. The regulator proposed a blanket ban on operations with cryptocurrencies, including mining, citing threats to financial stability and risks for investors.

According to a central online platform, the number of ads for the sale of coin minting equipment increased in January while demand decreased. Marvel Distribution, one of Russia’s leading retailers of these products, also reported decreasing video card purchases.

A representative from another marketplace confirmed the shrinking demand, noting that the CBR’s report has become a tipping point in consumer behaviour. That’s despite the monetary authority failing to gain support from other institutions and President Putin highlighting Russia’s competitive advantages as a mining destination.

Meanwhile, the federal government proposed an alternative strategy. The government proposed betting on regulating rather than banning cryptocurrencies. Deputy Prime Minister Dmitry Chernyshenko signed a regulatory roadmap for the sector at the end of January. The roadmap initially excluded crypto mining. However, according to a recent report by the daily Izvestia, Chernyshenko has later instructed several relevant departments and regulatory bodies to add mining to the document.

Experts in the industry have expressed doubts about the technical feasibility of prohibiting the extraction of digital currencies. Energy-rich Russia is one of the world’s major mining hotspots, and its importance has grown since China launched a crackdown on the industry last May.

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Chaahat Girdhar

I'm Chaahat Girdhar, a journalist by profession who's turning her dreams into vision and vision into reality. I'm curious and have an appetite for gaining new knowledge. So I'm looking forward to learning things in the better way possible.