According to a new government estimate, the share of crypto miners in Russia’s electricity consumption structure already exceeds 2%. Against this backdrop, the country’s industry ministry believes that it is time to bring the sector out of the shadows and regulate it.
Crypto Miners Burn More Electricity Than Russian Farmers
More than 2% of the total amount of electricity consumed in the Russian Federation needs to be “whitewashed” and regulated by miners extracting digital currency and their activities, said Russia’s Deputy Minister of Industry and Trade Vasily Shpak. Speaking at a forum organized by the ruling United Russia party, Shpak elaborated:
This is more than the cost of electricity for agriculture. In this sense, we cannot accept mining as an industry.
Cryptocurrency mining is now in the “grey zone”, it is not taxed in any way and poses risks to those involved, the government official noted during an event dedicated to the development of blockchain technologies and the regulation of digital financial assets. . Shpak is confident that the industry can be brought out of shadow and made transparent to the state.
The deputy minister expects the amount of electricity spent on mining to decrease in the future as the industry moves to less energy-intensive mining protocols. Still, it is clear that mining facilities will continue to consume electricity, Shpak is quoted as saying by Interfax. He further emphasized:
Our position is quite clear – mining should be recognized, regulated and established as an industrial activity.
Bitcoin mining is one of the major crypto-related activities that Russian authorities are now working to legalize, despite the Bank of Russia calling for a complete ban on all of them. A bill designed to achieve this was filed in the Russian parliament in late April. The draft law was recently amended and lawmakers withdrew a proposal for a one-year tax and customs duty waiver for mining entities.
Officials in Moscow believe that Russia should develop the region, citing its competitive advantages in terms of abundant energy resources and favorable climate. However, amid Western penalties imposed on the invasion of Ukraine, Russian miners have been targeted with sanctions depriving the country of opportunities to circumvent the sanctions. Russia’s share of the average global monthly hash rate has dropped to 4.66% this year.
Do you think electricity consumption in Russia’s crypto mining sector will continue to grow once the industry is regulated? Share your expectations in the comment section below.
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