According to a new estimate by the Russian government, crypto miners are already consuming more than 2% of the electricity in the country. Therefore, the industry ministry is of the opinion that it is now time for them to bring the crypto mining sector out of the shadows and introduce appropriate regulation for it. VasilyShpak, the Deputy Minister of Industry and Trade in Russia, said that the power consumption of cryptocurrency miners in the country is already in excess of 2%, due to which their activities need to be regulated and ‘whitewashed’. The United Russia party had organized a forum where the minister spoke.
He said that this was no longer about the cost of electricity being consumed, but the fact that mining now needs to be recognized as a complete industry. According to a government official, currently, crypto mining is in the ‘gray zone’. This activity is not taxed, which means that those involved in it are exposed to risks. The event where he spoke was about the regulation and development of digital financial assets and blockchain technologies. Shpak is adamant that it is possible to bring the crypto mining industry into the light and they can ensure transparency.
The Deputy Minister also believes that there would be a decline in the amount of electricity consumption for crypto mining in the future. This is because he says that they would make the switch to mining protocols that are not as energy-intensive. Regardless, he stated that it was quite apparent that mining facilities would continue their power consumption for now. Therefore, he said that it is essential to recognize mining and regulate it. He states that mining should be given the status of industrial activity. Even though the Central Bank of Russia (CBR) has called for a blanket ban on all crypto-related activities, the authorities are working on legalizing bitcoin mining.
After all, it is one of the biggest crypto-related activity that is being done in the Russian Federation. In late April, a bill had been submitted to the Russian parliament for this purpose. Some amendments were made to the draft legislation recently and a proposal of introducing a tax for one year on mining entities and offering them customs amnesty was recently withdrawn by lawmakers. The officials in Moscow are of the opinion that Russia should work on developing the crypto sector.
The fact that Russia has an abundant amount of energy sources, along with a good climate, could offer a number of advantages to the crypto mining sector. But, Russia’s invasion of Ukraine has meant that the country has had to deal with Western sanctions. Therefore, crypto miners in Russia have also suffered because they have also had to deal with the impact on sanctions that have been imposed to ensure the country does not use crypto for circumventing them. Hence, there has been a 4.66% decline in the contribution made by Russia to the global hashrateon a monthly basis so far and it could increase.
