According to a state-run fintech entity, cryptocurrency miners in Russia generated approximately $700 million in digital currencies last year. Despite this substantial growth, the industry remains unregulated, as the government has once again postponed the adoption of relevant legislation.
The Director of the Skolkovo Fintech Hub, Pavel Novikov, announced that Russian miners minted cryptocurrencies worth an estimated 50 to 60 billion rubles ($620 million to $740 million) in 2022. Speaking at the “Finance of the Future: Challenges and Opportunities” conference organized by Sberbank, Novikov highlighted that Russia ranks second globally in terms of cryptocurrency production.
Novikov further emphasized that Russian miners consumed around 1 gigawatt (GW) of electricity during the same period. He also acknowledged that the high efficiency of mining in Russia is partially due to the widespread illegal use of electricity in cryptocurrency production.
These statements follow data provided by Bitriver, Russia’s largest mining operator, revealing that the country climbed to second place worldwide in terms of total power capacity dedicated to crypto mining. However, comprehensive regulation of crypto mining activities has yet to be established in the Russian Federation, and the adoption of necessary legislation has been repeatedly postponed.
Russian authorities have shown a generally positive attitude towards crypto mining, as highlighted by President Vladimir Putin, who emphasized the country’s “competitive advantages” as a mining hotspot in early 2022. Additionally, analysts have predicted that Russia may capture 18% of the global bitcoin hashrate due to increasing regulatory pressures, tax burdens, and energy costs in the U.S. and Kazakhstan.
The reason for the latest delay in mining regulations, according to Anatoly Aksakov, the head of the parliamentary Financial Market Committee, is the requirement to first approve legislation that introduces criminal liability for the misuse of cryptocurrencies, as demanded by Russia’s law enforcement agencies.
It remains uncertain when Russia will regulate crypto mining and increase its share of the global mining market. Share your thoughts on this matter in the comments section below.
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FAQ about crypto mining regulations
What is the estimated value of cryptocurrency generated by Russian miners last year?
According to a state-run fintech entity, Russian miners generated approximately $700 million worth of digital currencies last year.
Is cryptocurrency mining regulated in Russia?
No, cryptocurrency mining activities are currently unregulated in Russia. The adoption of necessary legislation has been postponed multiple times.
How does Russia rank globally in terms of cryptocurrency production?
Russia ranks second globally in terms of cryptocurrency production, as stated by the Director of the Skolkovo Fintech Hub.
What is the reason for the delay in mining regulations?
The head of the parliamentary Financial Market Committee, Anatoly Aksakov, mentioned that the delay is due to the need to first approve legislation introducing criminal liability for the misuse of cryptocurrencies, as demanded by Russia’s law enforcement agencies.
What are the advantages of crypto mining in Russia?
Russia is considered a mining hotspot due to its competitive advantages, as highlighted by President Vladimir Putin. These advantages include regulatory pressures, tax burdens, and energy costs in other countries, which make Russia an attractive destination for miners.
4 comments
Wow, crypto mining in Russia is booming! $700 mil last year, that’s huge! But no regulations? C’mon, they gotta sort that out ASAP!
Russia climbing the ranks in crypto mining, impressive! But the delay in regulations is a concern. Hope they address the misuse of crypto soon!
Russia’s delay in crypto mining regulations is holding back its potential. They need clear guidelines to attract more miners and strengthen their position in the global market.
Russia’s positive stance on crypto mining is promising, but regulations are essential for long-term growth and stability. Time to embrace the potential and regulate responsibly!