Power consumption in the Russian bitcoin mining industry is now surpassing that of the agricultural sector in the country. It said the Deputy Minister of Industry and Trade during a blockchain panel discussion of the ruling party United Russia. His statement further pushes for efforts to legally regulate mining in Russia.
Because the state news agency interfax reported on May 27 that Vasili Shpak combined his statement with the demand to get the mining of Bitcoin and Co. out of the legal “gray area”:
We can not fail to recognize mining as an industrial activity or branch of the economy in this sense.
According to the Deputy Minister of Industry. Currently, mining in Russia is neither banned nor allowed. According to Schpak, this entails risks for the companies involved. Russia finished third in the global Bitcoin hash rate last year after the Chinese mining ban. Recently published figures University of Cambridge however, observed a Chinese comeback in January 2022 – and a fall in Russia to fifth place, after Canada. Whether Schpack’s statement suggests his country has claimed more than 4.66 percent of the BTC hash rate since January cannot be confirmed. However, the politician explained that in the future a trend can be expected for cryptocurrencies that require less energy than the top dog Bitcoin. He added:
Nevertheless, it is obvious that it is [beim Mining] It is a data processing that consumes energy in one way or another and it is a technological activity. Our position here is very clear: mining must be recognized, regulated and integrated into industrial activities.
Russian Prime Minister Mikhail Mishustin also spoke out loud interfax already in April benevolent to mining. Investigation of cryptocurrencies is therefore well suited to increase investment in data centers and comparable infrastructures.
Russia is planning mining legislation
In fact, Russia plans to pass a law that will guarantee legal certainty for mining. Deputies from the State Duma submitted a similar application by April 29th. The latest draft of 20 May moves away from the original idea of a special register for mining companies.
A one-year tax exemption for newly registered companies must also be abolished, as it can have a negative impact on the state budget. Instead, the same registration process is now planned for miners as for all other companies.
Kremlin’s new cryptocurrency course
Both the initiative for a mining law and the positive statements of Mishustin and Shpak must be seen in the context of Russia’s war of aggression against Ukraine and the associated Western sanctions. In the face of growing economic isolation, the Kremlin is apparently thinking more about Bitcoin and Co. As recently as January, the country’s central bank called for an almost comprehensive cryptocurrency ban, which would also have put an end to mining in Russia.
In contrast, Moscow is now planning its own crypto law. The once unthinkable acceptance of Bitcoin and Co. as a means of payment is also being discussed among senior officials. On May 31, even Russia’s central bank declared that it would not fundamentally oppose cryptocurrencies for international transactions.
It remains to be seen to what extent Russia will continue to penetrate the cryptocurrency space in the future.
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