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Monday, March 27, 2023

Crypto Miners Account for Over 2% of Electricity Consumption in Russia

Crypto Miners Account for Over 2% of Electricity Consumption in Russia – Miners extracting digital currencies utilize more than 2% of the total electricity consumed in the Russian Federation, and their actions must be “whitewashed” and regulated, according to Vasily Shpak, Russia’s Deputy Minister of Industry and Trade. 

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Shpak explained at a forum held by the ruling United Russia party:

“This is greater than the cost of agricultural electricity.” In this sense, we can’t help but think of mining as an industry.

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The government official highlighted during the event dedicated to the development of blockchain technology and the control of digital financial assets that cryptocurrency mining is now in the “gray zone,” where it is not taxed in any way and poses risks to those involved. Shpak believes the sector can be taken out of the shadows and made more transparent for the government.

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According to the deputy minister, as the mining industry progresses toward less energy-intensive mining protocols, the amount of electricity consumed on mining will decrease in the future. Nonetheless, mining operations would undoubtedly continue to consume electricity, according to Shpak, as quoted by Interfax. 

He went on to say that:

“Mining must be recognized, regulated, and established as an industrial activity, according to our position.”

Despite the Bank of Russia’s call for a blanket ban on all crypto-related operations, Russian officials are now seeking to legitimize bitcoin mining as one of the most important crypto-related enterprises.

In late April, the Russian parliament received a measure aimed at achieving this goal. The draft legislation was recently updated, and Lawmakers dropped a provision to grant mining companies a one-year tax and customs amnesty. 

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Russian officials believe the sector should be developed, citing the country’s competitive advantages in terms of substantial energy resources and a favorable climate. However, as a result of the sanctions implemented by the West in response to the invasion of Ukraine, Russian miners have really been targeted with sanctions, denying the country the ability to get around the limitations.

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