Russia’s Ministry of Economic Development recently introduced a proposal to explicitly legalize and tax Bitcoin mining in regions with an electricity surplus. It says Bitcoin mining, which exists in something of a legal grey area, should be recognized as a form of “commercial activity” and taxed once coins are converted into rubles.
As reported by local news agency Izvestia on Tuesday, the proposal is designed such that the country can benefit from mining while not overwhelming its electrical grid in vulnerable areas—a problem faced by other countries, including Iran and Kazakhstan. This will be accomplished by confining mining to reliable grids and setting electricity-use limits on individual miners, said the ministry.
To incentivize industry growth, the ministry also seeks to introduce lower electricity rates and tariffs for setting up Bitcoin mining farms in certain areas. It will raise energy prices for miners once a certain energy threshold is passed, though that limit is still undetermined.
Evgeny Vlasov—head of liquid cooling tech provider Comino—told Izvestia that he believes mining should be allowed everywhere in Russia, deeming it a wise investment in the tech sector. President Vladimir Putin has also recognized the economic benefit that mining could potentially bring to the country, given its “surplus of electricity” and “well trained personnel.”
Russia’s central bank, however, isn’t so keen on the idea. It has pushed to have Bitcoin and other cryptocurrencies outright banned, citing risks to the financial system and volatility concerns. That said, recent negotiations between the Bank of Russia and the national government have left regulation a more likely outcome.
Russia is currently the third-most popular country in the world for Bitcoin mining, behind Kazakhstan and the United States, according to statistics from Cambridge. Within the U.S., Texas has become a mining hotspot, with top officials like Governor Abbott and Senator Ted Cruz bullish on crypto and eager to invite the industry to the area.
Whereas Russia still approaches mining with caution, Texas sees it as a counter-intuitive solution to its unstable energy grid. The governor believes that the industry will help energy sources blossom within the state and prepare the grid for electricity-intensive winters.