The share of crypto miners in Russia’s power consumption structure already exceeds 2%, according to a new government estimate. On this backdrop, the country’s industry ministry believes it’s time to bring the sector out of the shadows and regulate it.
Crypto Miners Burn More Electricity Than Russian Farmers
Miners extracting digital currencies account for more than 2% of the total volume of electricity consumed in the Russian Federation and their activities need to be “whitewashed” and regulated, Russia’s Deputy Minister of Industry and Trade Vasily Shpak stated. 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 but recognize mining as an industry.
Cryptocurrency mining is now in the “gray zone,” it’s not taxed in any way and creates risks for those involved in it, the government official noted during the event devoted to the development of blockchain technologies and the regulation of digital financial assets. Shpak is convinced that the industry can be brought out of the shadows and made transparent for the state.
The deputy minister expects that in the future the amount of electricity spent on mining will decrease as the industry moves towards less energy-intensive mining protocols. Nevertheless, it’s obvious that mining facilities will continue to consume power, Shpak said, quoted by Interfax. He further emphasized:
Our position is completely unambiguous — mining must be recognized, regulated and established as an industrial activity.
Bitcoin mining is one of the key crypto-related activities that Russian authorities are now working to legalize, despite the Bank of Russia’s call for a blanket ban on all of them. A bill designed to achieve that was filed with the Russian parliament in late April. The draft legislation was recently revised and lawmakers withdrew a proposal to introduce a one-year tax and customs amnesty for mining entities.
Officials in Moscow believe Russia should develop the sector, citing its competitive advantages in terms of abundant energy resources and favorable climate. However, amid western penalties imposed over the invasion of Ukraine, Russian miners have been targeted with sanctions to deny the country opportunities to circumvent the restrictions. Russia’s share in the average global monthly hashrate has dropped to 4.66% this year.
Do you think the electricity consumption in Russia’s crypto mining sector will continue to grow after the industry is regulated? Share your expectations in the comments section below.
Image Credits: Shutterstock, Pixabay, Wiki Commons
Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.