Russia’s crypto mining sector is booming, with demand for equipment tripling in just a year. What’s behind this rapid growth?
According to a latest report from the Russian news agency PRIME, in Q4 2024, Russia saw a threefold increase in demand for industrial mining equipment and services compared to the same period the year before.
This growth aligns with legislative changes introduced by President Vladimir Putin in the summer of 2024. Under the new laws, which came into effect on November 1, 2024, businesses and individual entrepreneurs can engage in crypto mining once they are officially registered in the national miners’ registry.
Under the new regulations, both legal organizations and private entrepreneurs can engage in mining after registering in the government database. Individual miners are not required to register as long as their monthly energy consumption does not exceed 6,000 kWh. However, if they surpass this threshold, they must officially register as business owners.
Sergey Bezdelov, the director of the Association of Industrial Mining, noted that these regulatory adjustments have not only clarified the legal parameters for mining but have also established it as a reliable source of income, thereby expanding the industry’s potential and trustworthiness within the economy.
However, as the industry grows, the Russian government is introducing new restrictions to manage energy consumption across various sectors. A draft resolution published by the government proposes a ban on mining in certain regions from January 1, 2025, to March 15, 2031.
This ban will affect areas such as Dagestan, Chechnya, and Ingushetia, as well as specific locations in Irkutsk, Buryatia, and Zabaikalsky Krai, especially during peak energy demand periods.
The government has cited energy shortages and price disparities as key reasons for these restrictions. In subsidized regions with low electricity rates, miners have placed colossal strain on local power grids. Moreover, on November 18, 2024, Russia introduced a 15% tax on profits from Bitcoin mining.
Industry experts, including Bezdelov, suggest that investors consider allocating up to 5% of their portfolios to crypto mining. Bezdelov views mining as a viable diversification strategy, offering potential long-term stability and returns, even in a market known for its volatility.
