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Russia’s crypto mining generating capacity rose to 1 gigawatt in Jan-Mar 2022, making it the second biggest crypto miner behind the U.S.
Russia’s largest bitcoin mining provider, Bitriver, was cited by the Russian Kommersant business daily, as reporting that Russia had become the second biggest crypto miner in the world.
According to a report in The Moscow Times, the use of cryptocurrencies such as Bitcoin is still restricted within Russia. Citizens can hold them but are not permitted to use them to pay for goods and services.
Nevertheless, for cross-border payments, the Russian central bank went as far as to say back in September, that crypto cross-border payments would be inevitable.
Russian rethink on crypto
This was part of the Russian government’s rethink of its financial strategy in the face of financial sanctions. However, given the transparency of crypto, inherent in blockchain, U.S. authorities were able to detect and blacklist bitcoin and ether addresses that were thought to have been used for Russian defence equipment sales abroad.
Nevertheless, Russia has certainly softened its position on crypto generally, and even went as far as subsidising a crypto mining facility in Siberia, run by Bitriver. Subsidies included zero land tax, a lower income tax rate, and electricity costs slashed by half.
Bitcoin miner movement
It is interesting to see how bitcoin mining has moved around the globe depending on the geopolitical situation and the crypto thinking of governments around the world.
Regulatory concerns have had their effect on various jurisdictions, but possibly more importantly, some governments have introduced bans or restrictions because it was deemed that crypto mining was using too much of the local energy supplies.
For example, the government of Kazakhstan imposed higher tax rates on crypto miners, and closed them down during the winter months in order to try and reduce the load on the national power grid.
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.