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Russia Aims for Cryptominers
Russia Aims for Cryptominers
Monday, 09 August 2021

by Btari Nadine

“I think it’s the future for our financial system because it correlates with this development of digital economy,” Russia’s central bank governor, Elvira Nabiullina, said in June 2021.

Russian Government Surveillance on Cryptocurrency

Starting January 1st, 2021, cryptocurrencies will be allowed in Russia. Russia recently signed a new cryptocurrency law that lifts up the total ban on cryptocurrency, but still imposed restrictions on its use, especially as a form of monetary currency. In other words, cryptocurrency will not be allowed to be used in exchange for any goods or services.

As of now, Russians can legally mine, trade cryptocurrencies for other cryptocurrencies on exchanges, and own cryptocurrencies. Russian banks will also be allowed to open up cryptocurrency exchanges under the supervision of the central bank—who announces that they will issue Russia’s digital currency. 

Previously, cryptocurrency was portrayed as “criminal” while blockchain was seen positively. This is a similar view to the Chinese state, who sees that blockchain will be an essential help for the government to accelerate the benefits of digitization, while cryptocurrencies are regarded as a ‘threat’ to the domestic power and currency.

In the background, Russia has issued new internet regulations, namely Russia's Sovereign Internet Bill. At a glance, this bill is a drive to centralize the Russian internet and create a firewalled intranet similar to China’s internet approach. All Internet traffic is routed to the Roscomnadzor, Russia’s Internet censor. Satellite Internet providers are also required to use ground relays, regulated by the state. This way, Russia’s digital tools allow a total surveillance state of digital activity, including cryptocurrency.

Russian Crypto Association Prepares for Cryptominers

The Russian Association of Cryptoeconomics, Artificial Intelligence and Blockchain (RACIB) is working with federal and regional authorities, as well as state-owned enterprises, to formulate how to bring cryptominers to Russia. This project to attract crypto mining firms follows the Chinese government crackdown on crypto mining. 

RACIB is also working with a group of Chinese mining companies representing 25% of the global bitcoin (BTC, -0.15%) hashrate. For the note, miners from China accounted for about half of the global bitcoin hashrate.

The Chinese government appeared to be concerned about the environmental impact of crypto mining. So, one of RACIB’s working groups is developing a project for mining farms powered with renewable energy. In essence, Russia can serve crypto miners’ needs, because of their excessive resource of cheap electricity. On top of that, Russia naturally has a cold climate which could reduce the need for cooling systems and the availability of centralized energy system in the country. 

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