Russia Subsidizes Crypto Mining Facility in Siberia

Russia Subsidizes Crypto Mining Facility in Siberia

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The Russian government has backtracked its anti-crypto mining stance and has now gone as far as subsidizing a crypto mining facility in Siberia. The government added that it now provides tax incentives for those wanting to invest in the industry.

The government of Russia said it is providing direct support to a $12 million crypto mining center opening in east Siberia. According to local a local news outlet, the state-owned Corporation for the Development of the Far East (KRDV) will launch the facility in Buryatia, a republic in eastern Siberia and part of the Russian Federation.

The facility will open in the first half of 2023 and is owned and operated by BitRiver-B. The data mining center will house 30,000 mining devices, employ 100 workers, and consume 100 megawatts from the power grid. The Russian government has provided the facility with various incentives, including zero land or property taxes, a lowered income tax rate, and its electricity costs will be slashed by half.

Dmitry Khamereuv, director of the KRDV Buryatia, said:

The Bitriver-B company, which creates one of the most important enterprises for the digital development of Buryatia, has been provided with a wide range of government support tools. These are zero taxes on land and property; insurance premiums reduced to 7.6%, and a reduced income tax rate. After connecting the resident’s facility to the unified national power grid, the electricity tariff will be reduced by about half, for an energy-intensive enterprise this is one of the most important support measures.

Russian Government Invests in Special Economic Zones

Buryatia is a “territory of advanced development” – a special economic zone designated to attract national and foreign investments, and operations located there are incentivized accordingly. The Russian government’s support of the project is understandable, given its legal status. The KRDV, which will operate the facility, is a subsidiary of the Ministry of the Development of the Fra East and Arctic and oversees the support of investments in territories of advanced development.

A Desperate Russia Turns to Crypto

Since Russia invaded Ukraine, the country has been facing crippling sanctions from the West, preventing it from running its economy as efficiently as it would. As such, the lower house of parliament is considering a bill that would legalize a crypto market within the country, including the legalization of cryptocurrencies and their sale.

The country’s central bank, the Bank of Russia (BoR), is also reportedly planning to test the use of cryptocurrencies for international payments. The BoR and the Finance Ministry are both of the opinions that doing without cross-border settlements in crypto is no longer feasible given the current political situation Russia finds itself in.  

Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice. 

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