Russia wants to mine cryptocurrencies using natural gas
2 min readAccording to the Russian daily Kommersant, local ministries of industry, trade and digital development are reportedly exploring the possibility of allowing some Russian oil companies to use excess natural gas to power cryptocurrency data centers.
Russia wants to use natural gas to mine cryptocurrencies
The request concerns natural gas called “associated oil gas”, which is found in oil fields and is not used but is dispersed in the air or burned during the oil extraction process. It is a resource that wastes and contributes to greenhouse gases.
The goal would be to use this gas to power data centers that mine cryptocurrencies. This would have a double effect:
- natural energy for notoriously energy-intensive activities such as mining;
- respect for the environment.
Russia’s proposal to use surplus natural gas follows the logic of finding new sources of renewable energy, such as nuclear or solar energy, to overcome the problem of huge consumption of this activity. Following China’s ban on cryptocurrency mining, Kazakhstan and Russia have become popular destinations for Chinese mining companies. This decision could provide further pressure to regulate cryptocurrencies and mining activities in Russia.
The main law governing cryptocurrencies in Russia is the “Digital Financial Assets law”, which came into force earlier this year. However, further legislation is needed on their circulation in Russia and related operations. The legalization of crypto mining as an industrial activity is gaining support in government circles with Anatoly Aksakov, chairman of the parliamentary committee on the financial market, who said in September that it should be registered as such and taxed accordingly.
Kommersant also cites a source close to the Ministry of Industry, who said that one of Russia’s major oil companies already has a cryptocurrency project in full swing and would like to expand it. “However, this segment is in the legal gray zone and the company is concerned about the negative reaction of the central bank, so it turned to the ministry [industry]which may discuss the risks with the regulator. “
According to available official information, only the state-owned Gazprom Neft, a subsidiary of the Russian energy giant Gazprom and the third largest oil producer in the country, has a real mining project so far. The company launched it in an oil field in Khanty-Mansi Autonomous Okrug, a region in the Tyumen region. According to a January report, the oil giant managed to extract 1.8 BTC in a month.
