Crypto Mining Finds Fresh Momentum in Russia Following Putin’s Rubber Stamp
(Photo by Meiramgul Kussainova/Anadolu Agency via Getty Images)
Key Takeaways
- Russia has seen an uptick in demand for crypto mining equipment after the legalization of crypto mining.
- Russian mining machine suppliers recorded a significant jump in demand for crypto mining since April.
- Russia currently occupies the third spot in the Bitcoin mining hash rate chart; with legalization, it might soon overtake Kazakhstan, which is second.
Russia has emerged as an unlikely hub for Bitcoin mining, capitalizing on the void left by China’s draconian crackdown on the industry.
And now, with the Russian government’s recent decision to greenlight cryptocurrency mining, the demand for specialized equipment has skyrocketed.
According to a report published in a Russian publication, the legalization of crypto mining by President Vladimir Putin has triggered a surge in orders for crypto mining rigs, cementing Moscow’s status as a thriving destination.
Russian Mining Machine Demand Triples
Russia’s largest crypto mining company, BitRiver, and the official Russian Federation crypto mining machine distributor, Chilkoot, confirmed the sudden increase in the demand for mining rigs.
Prior to the Aug. 8 legalization of crypto mining, Chilkoot’s monthly sales of mining rigs hovered around 150-200 units, according to a statement from the company.
However, with the passage of the crypto mining bill, demand for equipment tripled.
The Deputy General Director for Communications, Oleg Ogienko, at BitRiver, said that the demand for crypto mining equipment and services started soaring in April when the bill was first introduced.
“We have seen an increase in demand from Russian and foreign private and institutional customers for our services compared to the beginning of this year,“ Ogienko explained.
The new mining law brought long-sought clarity to the industry by defining key terms such as “digital currency mining,” “mining pool,” and “mining infrastructure operators.”
The legislation established a regulatory framework outlining the rules of the road for the country’s mining sector and its players.
Russia Advances Crypto Policy to Battle Sanctions
For years, Russia’s approach to cryptocurrency has been characteristically laissez-faire.
While the central bank advocated for a blanket ban, the government quietly tolerated the lack of regulations, effectively allowing crypto use to thrive in a legal gray area.
Periodic warnings from the State Duma about the crypto market’s illicit activities and volatility notwithstanding, Russia’s crypto mining industry has flourished, with the country now ranking third in Bitcoin mining hash rate share.
The recent legalization of mining could propel Russia to second place, surpassing Kazakhstan.
Russia’s frigid climate, it turns out, may prove a boon to the mining industry, as the heat generated by Bitcoin mining rigs could be repurposed to warm homes and workplaces.
The recent change in Russia’s crypto policy can be attributed to the rising sanctions against its companies and individuals.
The United States has cut off international banks from dealing with sanctioned entities, severely curtailing Russia’s ability to participate in global trade.
Russia has turned to crypto after trying all alternative methods to lessen the impact of sanctions.
The Russian government tried dealing with the local fiat currencies of its allies. It also tried to develop its payment system to rival SWIFT but has now turned to crypto for international payment settlement.
Reports have emerged that Russia is now planning to launch two new digital exchanges and could begin trials as early as Sept. 1.
Russia’s Newfound Crypto Embrace Sparks Plans for New Exchanges and a BRICS-Linked Stablecoin
