According to a new report, the Russian crypto mining industry could grow “between 20% and 40%” by 2024.
BitRiver is the largest Russian crypto mining operator. The company is one of the driving forces behind a recent legislative push that could lead to a “legalization” of the sector
Russian crypto mining industry ‘continues to grow’
In the report, analysts claim that “low electricity costs” and “lack of strict regulation by authorities” led to “good growth momentum” for crypto miners. The report’s authors quote Industrial Mining Association director Sergei Bezdelov as saying that the industrial crypto mining market will “double” by 2023.
BitRiver claims that local Bitcoin miners generated a total of about 54,000 BTC last year. The company said Russia “continues” to be one of the world’s largest crypto mining powers. BitRiver also claimed that “over 95%” of Russian miners’ “computing resources” are used to mine BTC.
However, not all experts agree with this statistic. Encry Foundation co-founder Roman Nekrasov said he believes 90% of Russia’s mining efforts are for BTC. He said 10% of Russian miners are focused on altcoins such as Litecoin (LTC) and Kaspa (KAS).
Market still largely unregulated
Currently, mining has no legal status in Russia. However, many in Moscow have proposed banning crypto in various forms. Miners are urging lawmakers to hurry up and legalize their sector, even if it means paying taxes on their earnings. The Department of Energy has proposed easing the strain on overloaded power grids by forcing miners to shut down their facilities for a certain period each year.
The latest legislative proposals reportedly propose either restricting private mining or allowing utilities to impose fines on suspected “home” crypto miners.
Low electricity costs provide more growth potential
Legal experts spoke up. They explained to the authors of the report that there are already legal regulations for crypto and crypto mining in Russia. Elizaveta Vikhlyantseva, a lawyer at Vegas Lex law firm, noted that there is nothing in Russian legislation that “prohibits” the construction of “crypto mining farms.”
Meanwhile, Yaroslav Shitsla, head of the IT and IP dispute resolution department at Rustam Kurmaev and Partners law firm, said that “cryptocurrency has already been recognized as property.” Shitsla pointed to the Act on Digital Financial Assets as evidence for this claim. While this may be true, critics have called this law “substantive. ” The Financial Action Task Force (FATF) seems to agree. It has downgraded Russia’s compliance rating accordingly.
Nevertheless, experts have drawn a positive conclusion. Nikita Vassev, the founder of Terracrypto, claimed that the rapid growth of mining in Russia was due to the low cost of electricity. Vassev added that the “climatic conditions” in Russia are also favorable for miners. The expert notes that “most miners choose Siberia because they can save on cooling costs there.” Added that there are “many manufacturing facilities” in the country that “could easily be repurposed for Bitcoin mining.” Most agreed that the “lack of strict control by local regulators” creates “positive conditions for doing business with cryptocurrencies.”
