Russia Puts the Brakes on Private Crypto Mining While Greenlighting Industrial Operations

In a move that could reshape Russia‘s burgeoning cryptocurrency landscape, lawmakers are working to ban private citizens from crypto mining. Anton Tkachev, Deputy Head of the State Duma’s Committee on Information Policy, Information Technologies, and Communications, revealed the government’s intention to legalize mining only for registered businesses. The shift comes as Russia faces international sanctions and a surge in crypto investments, according to cryptonews.

Tkachev stated that a new “industrial [crypto] mining” category is in the pipeline. The Centre of Economic Classifications, a national regulator overseeing economic activities, is set to add this new classification. Consequently, only registered businesses will be eligible for legal mining operations. 

The Industrial Mining Association, Russia’s first such body for crypto mining, was founded last month. According to Tkachev, the association aims to evolve into a self-regulatory organization. This body is expected to shape the sector’s trends. Because of this, large mining companies like BitRiver could benefit significantly.

However, this development casts a shadow on home-based crypto miners. Despite Russia’s reputation for low energy costs and optimal mining conditions, private individuals will be left out of the legalized crypto mining loop. For years, these miners have been using subsidized energy, much to the chagrin of Russian power providers.

Tkachev acknowledged the rise in Russian crypto investors, citing that over 13 million crypto wallets were opened last year in the country. He credited this surge as a “natural response” to international sanctions. Notably, he mentioned an increase in financial literacy among the Russian populace, especially concerning various financial assets.

Although Tkachev suggested that crypto may not find a place in Russia’s domestic economy, he hinted at its potential role in international trade. While Russian state entities and companies currently cannot transact in crypto, changes are likely on the horizon. By next year, Tkachev anticipates that cryptocurrency or the digital ruble will be employed in international transactions by state-run enterprises.

In summary, while private crypto mining faces an uncertain future in Russia, industrial mining is gearing up for a boom. The policy shift may be both a boon and a bane—fostering organized growth in the sector, but leaving individual miners and small-scale operators in the lurch.