Surge in Cryptocurrency Mining in Russia
A recent statement from a senior official in Moscow has unveiled a remarkable surge in the number of registered cryptocurrency mining entities within Russia. Over the last half-year, the figures have skyrocketed, with more than a thousand firms now operating under the Federal Tax Service (FTS), representing a tenfold increase. This development was highlighted by Alexey Nechaev, leader of the New People Party and a prominent lawmaker, during a plenary session in the State Duma on July 23.
Legislative Changes and Economic Impact
According to Nechaev, the rise in registered crypto miners follows the enactment of new legislation last year. This law mandates that any crypto mining operations consuming over 6,000 kilowatt-hours of electricity monthly must register with the FTS. The registration process not only brings these enterprises into the regulatory fold but also compels them to report their mining activities and wallet holdings to the authorities. Moving forward, registered firms will need to pay taxes on their profits, with industry estimates suggesting that the Russian government could reap upwards of $500 million annually from this new tax regime.
Nechaev applauded his colleagues for their foresight in opting to regulate the industry instead of imposing outright bans, noting that prior to the legal framework, many miners operated in a murky legal environment, hindering their ability to contribute to the economy legitimately. This lack of regulation often led to severe energy shortages in some regions due to power grid overloads caused by unregulated mining activities.
Growth and Investment Trends
The transformation in the regulatory landscape has been striking; before the law was implemented, only a mere 91 crypto firms were officially recognized. Now, this number has surpassed 1,000. Furthermore, the head of the New People Party stated that these industrial miners are increasingly diverting their investments towards artificial intelligence, having reportedly allocated around 5 billion rubles (approximately $63 million) this year alone for AI initiatives. This shift indicates a rising trend of investment within Russia, moving away from overseas ventures.
Russia’s Global Standing in Cryptocurrency
In terms of its global standing, Russia has established itself as a formidable player in the cryptocurrency sphere, currently ranking second worldwide in Bitcoin mining, trailing only the United States. This summer, local mining operations achieved a hashrate exceeding 150 exahash per second, accounting for 16.6% of the world’s total hashrate. Experts estimate that in 2024 alone, Russian miners produced Bitcoin worth approximately $4.7 billion.
Future Regulatory Considerations
In light of these advancements, there are ongoing discussions among policymakers about tightening enforcement against illicit mining activities. A recent call from a senior official advocated for the state to begin confiscating cryptocurrency from illegal miners, proposing that formally acknowledging cryptocurrency as a type of intangible asset would facilitate judicial actions against such entities.
