According to the latest report issued by government officials in Russia, cryptocurrency mining accounts for 2% of the entire electricity dispersed in the country. Because of this estimate, officials stated that now it’s time to introduce regulations on crypto mining to prevent it. Currently, the global crypto market capitalization stood at $1.21 trillion, with Bitcoin (BTC) dominating the market.
According to the Russian government, the energy consumption share of the crypto industry has exceeded that of the nation’s agricultural industry. This estimate indicates the country’s recovery signs after Russia dropped out of the top three countries in terms of global Bitcoin mining hash rate share.
Vasily Shpak, the country’s deputy minister of trade, took to social media following the latest crypto mining estimate. He said: “Do you know how much electricity is consumed because of the current cryptocurrency mining activities? It’s over 2% of the overall map of electricity generation, which is more than the overall electricity costs associated with agriculture. We can’t help but think of crypto mining as an industrial activity or a business in general.”
Apart from Shpak, Russia’s Prime Minister Mikhail Mishustin also urged lawmakers and officials to look into the crypto mining industry. Back in April, Mishustin stated, “We also think that in order to fuel investment, particularly in fixed capital, we can call a debate on the current mining issues. We can further discuss the creation of data centers and related infrastructure.” On the other hand, the Central Bank of Russia calls for a blanket ban on the nation’s crypto mining operations.
The Gray Zone
The country’s government officials stated during an event surrounding the advancement of blockchain technology and the regulation of digital financial assets that crypto mining stands in the “gray zone” at present. This means that the country does not tax mining activities in any manner and it poses risks to the people engaged in such activities. Shpak thinks the industry needs to be more transparent and should be taken out of the shadows.
He believes as the crypto mining industry advances toward less energy-consuming techniques involving mining, the amount of electricity required to mine cryptocurrency will decrease in the coming months. Irrespective of these measures, mining activities would certainly consume some amount of electricity, the deputy minister added.
“Cryptocurrency mining must be acknowledged, managed, and developed as an industrial activity,” he said.
Given the Central Bank’s call for a blanket ban on mining operations, the country’s authorities are seeking to legalize crypto asset mining as one of the most crucial crypto-related industries. Back in April, the country’s Parliament received a proposal aimed at accomplishing this goal. They highlighted the need to develop this industry, considering the country’s competitive advantages regarding ample amount of energy resources and a cleaner environment. In any case, because of the sanctions deployed by the West in response to the ongoing war with Ukraine, crypto miners in Russia have been attacked with sanctions, thereby rejecting the country the ability to get past the limitations.
According to the latest study by the Cambridge Bitcoin Electricity Consumption Index (CBECI), Russia’s Bitcoin mining has rate plunged to 4.55% behind Kazakhstan, China, and the U.S.