Cryptocurrency miners in Russia have extracted digital currencies for around $700 million last year, according to a state-run fintech entity. However, the growing industry remains unregulated with the government having postponed the adoption of the respective legislation once again.
Russian Crypto Miners Produce Coins for up to 60 Billion Rubles in 2022
Miners operating in Russia have minted cryptocurrencies for an estimated 50 – 60 billion rubles ($620 million – $740 million) last year, the Director of the Skolkovo Fintech Hub Pavel Novikov announced, quoted by the Prime business news agency.
Speaking at the “Finance of the Future: Challenges and Opportunities” conference organized by Russia’s largest bank, Sberbank, the executive of the state-owned company pointed out that the figure ranks Russia second in the world by that indicator.
Novikov also highlighted that Russian miners have consumed about 1 gigawatt (GW) of electric power during the same period. He also noted that the high efficiency of mining in Russia, as he put it, can be partially attributed to the widespread practice of illegal use of electricity in cryptocurrency production.
His comments come after data provided by Russia’s largest mining operator, Bitriver, revealed in April that the country has for the first time climbed to second place globally in terms of total power capacity of the facilities devoted to crypto mining.
Mining Bill Delayed Again Due to Concerns of Law Enforcement Agencies
While Russian authorities remain reluctant to legalize many operations with decentralized cryptocurrencies like bitcoin in the country, statements by officials in Moscow have indicated their generally positive attitude towards crypto mining.
The country’s “competitive advantages” as a mining hotspot were highlighted by President Vladimir Putin in early 2022. And in May of this year, analysts predicted that Russia may take up 18% of the bitcoin hashrate in a next big migration of miners. Conditions for the latter have been created by increasing regulatory pressures, tax burden and energy costs in the U.S. and Kazakhstan.
However, crypto mining activities are yet to be comprehensively regulated in the Russian Federation and the adoption of the necessary legislation has been postponed on multiple occasions. The reason for the latest delay, according to the head of the parliamentary Financial Market Committee, Anatoly Aksakov, is the need to first approve legislation introducing criminal liability for the misuse of cryptocurrencies, as insisted on by Russia’s law enforcement agencies.
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