Russia has become one of the world’s top three locations for bitcoin mining activity, following China’s crackdown on crypto earlier this year.
In August 2021, according to the Cambridge Bitcoin Electricity Consumption Index, bitcoin miners in Russia accounted for 13.6% of the total global BTC mining hash rate distribution, bested by only the United States (26.2%) and Kazakhstan (21.9%).
Energy consumption has grown dramatically in certain Russian regions. Some 5,000 km east of Moscow and 1,700 km north of China, the Irkutsk region with its rich energy resources has “reportedly seen its energy consumption rates exceed last year’s by almost 160%,” notes Cointelegraph.
Irkutsk Governor Igor Kobzev, attributed this “avalanche-like growth” to illegal crypto mining activity, worsened by the exodus of miners from China.
Evolution of network hashrate
In this context, Russian energy minister Nikolai Shulginov said last week that Russia could introduce special electricity tariffs for cryptocurrency miners.
“In order to maintain the reliability and quality of power supply, we believe it is necessary to prohibit miners from consuming electricity at residential tariffs,” RBC quoted Shulginov as saying.
In an exchange with Cointelegraph, Igor Runets, CEO of BitRiver — a leading Russian crypto mining colocation service provider — was positive about such measures: “They [would] help miners enter the legal field, so the state can take the first step towards regulating the industry, which will ultimately lead to transparency of the entire industry.”
Runets said his company currently pays for its electricity at business customer rates, i.e. “2.5 or 3 times more than individuals.”
Ban on crypto payments, potential restrictions on crypto investment
Meanwhile Deputy finance minister Alexey Moiseev justified the ban on domestic cryptocurrency payments under a new law which came to force in January 2021.
“In principle, the countries which have allowed cryptocurrencies [as payment means] — first of all, Sweden, for example — now have to deal with the fact that national currencies are not accepted in a number of organizations. In Stockholm, in some places you will not be able to pay with kroons, they will demand payment in cryptocurrency,” Moiseev asserted, as reported by Interfax.
As of today, Russian citizens are allowed to purchase and trade cryptocurrencies, and even use them outside the country on foreign exchanges. Russia has no plans at this time to prohibit such operations, Moiseev said.
Earlier this month Anatoly Aksakov, the head of the State Duma Committee on Financial Markets, expressed more restrictive views. According to him, members of the State Duma are considering introducing restrictions on investments of unqualified individual investors in cryptocurrencies and cryptoassets. He believes these measures are necessary to protect citizens from the risks associated with such investments.
“Here, of course, we need to prescribe in the legislation the norms that will protect unqualified investors from ill-considered investments in digital currencies,” Interfax quoted him as saying.
