Russia Surges to Second Place in Global Cryptocurrency Mining Market

Russia has now claimed second place in the world for cryptocurrency mining, trailing only the United States. In Q1 of 2023, Russia contributed 1 GW of mining capacity, while the US maintained its lead with 3-4 GW. According to BitRiver, the top 10 list also includes Gulf States, Canada, Malaysia, Argentina, Iceland, Paraguay, Kazakhstan, and Ireland.

Previously, Russia held third place, but recent restrictions on mining activities in Kazakhstan and China contributed to its positive shift in ranking. The development of the US market has slowed down due to rising electricity prices, reduced mining profitability, and the discontinuation of tax incentives.

Despite the growth in Russia’s crypto mining capacities, there remain several factors that hinder its development. Russia has yet to establish a legal framework for miners, and the draft law on crypto mining regulation submitted to the State Duma in November 2022 has not been passed. Balanced and calibrated legislation would allow the mining industry to plan operational and financial activities, develop major projects, and attract investment. The lack of legal clarity may inhibit the industry’s development and the inflow of foreign investment.