Irkutsk Governor Calls for Tighter Crypto Mining Regulations Amid Tax Shortfalls and Energy Crisis

  • Sergey Maga
  • 19 October, 2023 08:59
Irkutsk Governor Calls for Tighter Crypto Mining Regulations Amid Tax Shortfalls and Energy Crisis

Igor Kobzev, the Governor of the Irkutsk Region in Russia, is calling for more active regulation of mining activities. Speaking at the Legislative Assembly, he highlighted that despite a 26% increase in legal crypto mining, the region is losing out on significant tax revenue. Kobzev also pointed out the strain on the energy supply system due to mining activities, affecting both social infrastructure and the general populace, according to rbc.

In line with this, the Irkutsk regional government is working closely with federal bodies to develop legal frameworks around crypto mining. The aim is to boost investments and fortify the socio-economic development of the region. This call for regulation coincides with Russia’s broader move to legalize Bitcoin mining, offering a formal structure that can potentially bring in more taxes.

The urgency for regulation gains weight as energy consumption in the Irkutsk region has quadrupled due to crypto mining activities. This uptick has led to stress on the existing energy infrastructure, causing disruptions that ripple through to residential and public service sectors. Consequently, the Governor is seeking a balanced approach that accommodates the booming crypto mining industry while safeguarding public interest.

Russia is already taking steps to organize the sector through the newly established Industrial Crypto Mining Association (IMA). The IMA comprises five companies, including BitRiver and Intelion Mine, that provide cryptocurrency mining capacity in data centers or supply mining equipment. This establishment reflects a growing acceptance and institutional interest in mining, aligning with the Governor’s call for a more regulated environment.

In conclusion, as the Irkutsk region grapples with the challenges posed by an expanding crypto mining industry, the need for comprehensive legislation is becoming increasingly evident. Striking a balance between encouraging a burgeoning industry and ensuring the welfare of the community has become a top priority for the regional government.

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