Friday, February 3, 2023

Seeking Regulation, Russian Regions Interested in Crypto Mining

Seeking Regulation, Russian Regions Interested in Crypto Mining

Several Russian regions are interested in cryptocurrency mining and have set up facilities for miners, awaiting mining-friendly legislation at the federal level.

Also see: Australian Government Staffers Questioned in ‘Sneaky’ Mining Operation

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Western Regions Poised for a Mining Boom

Although the Russian government remains undecided about what stance it should take with regards to cryptocurrencies and ICOs, with crypto mining technically still illegal, regional authorities are keen to embrace the crypto space.

The country’s westernmost regions, Leningrad Oblast (known best for its main city of St. Petersburg) and the Kaliningrad exclave, separated from mainland Russia by Lithuanian territory, are likely to become trailblazers in officially sanctioned mining.

Regional authorities are apparently aware that a substantial number of Russians are turning to cryptocurrency mining to supplement their incomes, which have been dwindling for the past few years. Others mine on a full-time basis.

Russia’s electricity rates for private individuals are low compared to Western Europe and other parts of the world, making crypto mining a potentially lucrative enterprise. However, uncontrolled and unregulated mining has led to safety hazards, and hastily assembled mining farms that lack proper cooling systems have been known to cause fires.

Officials appear poised to make cryptocurrency mining legal to improve safety and collect the taxes it could potentially generate.

Mining and Strawberries: A Kaliningrad Dream Forever

Interestingly, Kaliningrad is looking at ways to combine crypto mining with other concurrent business activities, doubling the benefits of the requisite computing resources.

According to regional governor Anton Alikhanov, projects related to the use of the heat generated during the mining process, such as heating greenhouses, are currently being considered. Kaliningrad is looking to expand its greenhouse agriculture industry, to include strawberries and other produce.

Russian Ideas for a Blockchain Future… With a Little Help from Her Nuclear Past

Meanwhile, authorities in Leningrad Oblast have promised to create a techno park specifically focused on crypto mining. The region’s governor Alexander Drozdenko announced that the premises of a former nuclear power plant outside of St. Petersburg will be used as a crypto mining facility, allowing miners to take advantage of the existing power network and cooling equipment.

The only obstacles to the plans are the removal of old nuclear equipment and the current lack of legislation regulating crypto mining in Russia.

According to the Russian Association of Cryptocurrency and Blockchain (RACIB), most of the country’s crypto mining is centered around Moscow and Leningrad, as well as the Tatarstan, Irkutsk, Sverdlovsk, Tomsk, and Chelyabinsk regions.

Those regions currently lead others in technological development, but other areas, such as Krasnoyarsk, have even higher potential for crypto mining due to lower electricity rates and colder climates.

Despite Promising Rhetoric, the Kremlin Remains Unmoved

Still, all initiatives aimed at facilitating crypto mining across Russia rely heavily on the passing of crypto legislation at the federal level. While Vladimir Putin has discussed developing Russia-based blockchains, no concrete actions have taken place.Russian crypto mining Kremlin decision

Although senior Russian officials have been calling for wider applications of blockchain technology, they are divided on the issues of cryptocurrency circulation and mining.

In turn, regional authorities keen on crypto mining projects have been negotiating with the federal government, actively pushing for the adoption of legislation. How soon they will get a regulatory environment conducive to safe and legal cryptocurrency mining remains to be seen.

Have your say. Given its infrastructure and climate advantages, should the Russian government legalize cryptocurrency mining?

Images via Pixabay

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