The cryptocurrency mining industry in Russia is experiencing a significant boom, with the number of registered mining firms increasing tenfold in the past six months. According to a report by RBC, over 1,000 firms are now legally mining coins, signaling a growing interest in crypto assets among Russian businesses.
At a State Duma plenary session, lawmaker Alexey Nechaev, head of the New People Party, highlighted the rapid growth of the mining sector, stating that the future belongs to cryptoassets. He praised the decision to regulate, rather than ban, mining activities, emphasizing that driving miners into the shadows with fines and bans is counterproductive.
The implementation of a new law in Russia last year mandated that crypto miners using more than 6,000 kWh of electricity per month must register with the Federal Tax Service. This move aims to bring transparency to the industry and ensure that miners pay taxes on their earnings, potentially generating over $500 million in revenue for the Russian Treasury annually.
Nechaev also noted that prior to the introduction of the law, many miners operated in a grey area, unable to pay taxes or operate their businesses officially. This lack of regulation led to power grid overloads in some regions, prompting the need for a more structured approach to crypto mining.
The Association of Industrial Miners, the largest industry group in the Russian mining sector, claims that Russia now ranks second globally in terms of Bitcoin mining volume, trailing only the USA. The country’s mining output has reached 150 EH/s, representing 16.6% of the global hashrate, with experts estimating that around BTC 40,000 (approximately $4.7 billion) was mined in Russia in 2024.
In addition to the growth in mining activities, Russian miners are also investing heavily in artificial intelligence (AI) development, with a reported investment of 5 billion rubles ($63 million) this year. Nechaev highlighted the shift towards domestic investment and the reduction in mining-related power outages as positive outcomes of the regulatory measures.
Looking ahead, the Russian government is exploring measures to seize crypto assets from illegal miners, with proposals to officially recognize coins as intangible property. This move could enable courts to seize assets from illicit mining operations, further strengthening the regulatory framework surrounding cryptocurrency activities in the country.
Overall, the rise in registered crypto mining firms in Russia reflects a growing acceptance and integration of cryptocurrencies into the country’s economy, setting the stage for continued growth and development in the sector.