Russia, the country that has announced the creation of a national cryptocurrency, might welcome Bitcoin miners from Asia and Europe. China has been taking different measures against cryptocurrencies and Initial Coin Offerings (ICOs). Besides that, the Chinese authorities are thinking about regulating the mining industry in the country. The fact that cryptocurrency miners are consuming an important amount of electricity for industries and towns may end with tougher restrictions to this activity.
That’s why Russia could be one of the countries where miners could install their mining farms. With an important electricity capacity without being used, miners could start to profit from it. Everything depends on the further regulations in the market. Canda, Belarus and other countries are opening their boundaries and markets to cryptocurrency-related investments, including mining activities.
Russia Sees a Business Opportunity
Russia has some of the advantages that China also has for cryptocurrency mining. There is an electric installation that is being under used and excess of electricity that could be used to power the mining industry.
According to the Russian Association of Blockchain and Cryptocurrency (RACIB), has reported several applications (more than 40) from different companies and businesses from the European Union and China. The intention is to move the cryptocurrency mining farms to Russia.
“In Russia, the number of such factories is already in the hundreds, and our country has energy resources that can be sold to miners effectively,” Ria Novosti quoted the association’s president Yuri Pripachkin.
This increased demand must be taken seriously by Russian Authorities. The Russian government should be able to manage this influx of cryptocurrency miners that are arriving to the country.
Russia offers low temperatures (so as to cool down the hardware devices used for cryptocurrency mining), low electricity prices (as low as in China), good internet connection in some areas, and the possibility to be integrated on a regulated market in the future. Moreover, there are several abandoned buildings that can be renovated and adapted to host mining activities.
Legalized Cryptocurrencies in Russia
Alexei Moiseev, the Russian Ministry of Finance, said that the government is searching a way to control cryptocurrencies in the country.
“This is about the fact that buying and selling cryptocurrencies will be somehow standardized. The general idea is that it will be necessary to buy and sell on official exchanges, as it will be declared, it will be legalized.”
But the mining activity will also be regulated by the government. According to the ministry, miners will have to be regulated with a central authority. These are good news for the Russian cryptocurrency ecosystem as long as they don’t get banned. The idea behind regulations is to control the activities around cryptocurrencies. It is important to mark that Know Your Customer (KYC) and Anti Money Laundering (AML) policies will be strengthened.
If we follow what the Russian government planned to do with the CryptoRuble, cryptocurrencies not declared will have to pay a tax that would be around 13%. But clearly, it does not solve the problem of terrorism financing, money laundering and other criminal activities. With the 13% tax, it would be a way to launder money within the government legislation. That is, more regulations will come in order to avoid this situation.
The G-20 summit that will be hosted in Buenos Aires will pay close attention at the coming cryptocurrency regulations. Several important officials all over the world have pressed to have a common agenda to regulate the cryptocurrency market. Canada, Switzerland, Belarus, are creating special zones for cryptocurrency miners. It will be important to follow the coming regulations and movements in the world in order to understand whether Russia will become the next hub of cryptocurrency miners or not.