Mining in Russia in 2024

  • Data Centers
  • 20:30 Jan 06, 2024
Mining in Russia in 2024

In Russia, since 2022, there has been a law prohibiting the payment of goods and services with cryptocurrencies or NFTs within the country. However, owning cryptocurrencies or NFTs, as well as investing in them, is not prohibited. Trading bitcoins and other cryptocurrencies through CFDs is only allowed with pro-Russian states.

Government Policy on Mining in Russia

The Central Bank and the Ministry of Finance have agreed to legalize cryptocurrencies in international payment transactions. Since Russia currently lacks a legal framework for mining, cryptocurrencies need to be legalized and regulated first. In the current conditions, refraining from cross-border payments is not feasible. The regulation and control of cyber transactions by the Central Bank of Russia indicate that this is a justification for the necessary legalization. According to the government, this will help prevent the opening of cryptocurrency wallets outside of Russia, which allows bypassing Russian laws on money laundering.

As Russia is still excluded from the international SWIFT payment system due to the war in Ukraine, legalizing Bitcoin, Ethereum, and other cryptocurrencies for international trade could serve as a means of conducting payment transactions with pro-Russian states. The Ministry of Finance advocates for the legalization of cryptocurrency operations by Russian companies, as it will allow them to import essential products and ensure the financial survival of companies. This indicates that Russia wants to create a platform that facilitates payment transactions with other countries.

Bitcoin Mining in Russia in 2024

According to media reports, Russia is preparing to legalize cryptocurrencies in international settlements to enable local companies to import essential goods. Last year, mining generated profits of almost 63 trillion. This figure increased by almost 77%, elevating Russia to the second position in the global mining market.

Advantages of mining in Russia:

  • Low equipment costs.
  • Insignificant maintenance and electricity costs.
  • High foreign exchange rates.

With proper mining management, there are high chances of covering investments and achieving net profits.

Cryptocurrencies have gained significant importance in Russia in recent years. It is expected that the cryptocurrency market will continue to grow in 2024. Some analysts predict that Bitcoin may reach a value of $80,000 in 2024.

If the new laws regarding mining are successful, Russia could gain up to $13 billion or 11.3 billion euros. Authorities are laying the groundwork for the legal taxation of cryptocurrency-related transactions, and a bitcoin mining center project is possible. Miners would be subject to a 15 percent tax.

Innovations in Bitcoin Mining in Russia

Recently, Russia has repeatedly made headlines regarding cryptocurrencies, facing sharp criticism, with the Russian Central Bank even deeming them hostile. Representatives of the organization stated that cryptocurrency would undermine the country's financial sovereignty. In this regard, bankers considered Bitcoin as a hostile instrument. Shortly afterward, a conflict arose in neighboring Kazakhstan, which apparently led to a reconsideration of this policy.

After this turn of events, Russia officially accepts cryptocurrencies as a currency. There are plans to increase the number of miners and attract investments to the Bitcoin mining rankings from 2024.

Recently, government representatives spoke positively about cryptocurrencies for the first time, acknowledging their importance to the country's economy. However, cryptocurrency owners should not rejoice too early – officials noted that Bitcoin miners must follow certain rules. The new law is entirely written in such a style. At the same time, authorities do not anticipate broad support for Bitcoin or any other cryptocurrency.

Bitcoin Law in Russia

The country's authorities have made it clear that the previously critical position of the Russian Central Bank will not hinder the legalization of cryptocurrencies. In particular, this concerns a law that the Russian government is currently working on in collaboration with the Central Bank of Russia. This law is expected to come into effect from the beginning of next year. If the law is enacted, cryptocurrencies will cease to be considered solely digital investments and will become currencies.

Legally, this means that only licensed partners of the authorities are allowed to issue cryptocurrency. In addition, transactions with cryptocurrencies should be reported as soon as their volume reaches 600,000 rubles or more (currently equivalent to 7,044 euros).

Authorities are trying to restrict the use of cryptocurrency with these laws. The reason is simple – transactions with tokens cannot be effectively tracked, and regulating the acquisition of cryptocurrency is not easy. Peer-to-peer exchanges are explicitly mentioned in the Russian government's statement as an obstacle to the legalization of crypto. Customs dealers must also have a license if they want to operate in the Russian market.

In fact, the idea of controlling cryptocurrency is illusory, as Nigeria has proven – a country where cryptocurrencies are officially completely banned. Of course, at this point, the question arises why Russia does not take the same step and simply bans cryptocurrencies. The reason is obvious – the country's budget could receive $13 billion annually through cryptocurrency.

Peer-to-peer exchanges can never be fully tracked. Instead of using paper currencies, clients often pay with vouchers or other easily acquired and transferable items.

It is doubtful whether industrial Bitcoin miners will accept this tax or prefer to move their farms. They are the only ones to whom such a tax is practically applicable. Small private miners will not be affected by it in any way. Compliance with the authorities' requirements should be voluntary on the part of miners.

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