The Russian Ministry of Energy has announced plans to grant crypto miners access to surplus electricity capacity as part of the nation’s ongoing crypto pivot. Russian Energy Minister Sergei Tsivilev stated that the government is prepared to provide surplus energy to legal miners who are registered with the government and pay taxes. This move aims to bring miners out of the unregulated “gray zone” and into a more formalized sector. While miners will be required to pay taxes on the coins they mine with surplus energy, they may only be asked to pay a nominal amount for the electricity, creating a mutually beneficial situation for power providers, miners, and the government.
The minister indicated that social development programs and the industry remain the government’s priority in terms of accessing power, rather than mining. However, many miners argue that their industry is essential for job creation, skill development, and national IT projects. They also claim to have mined a significant amount of Bitcoin in 2023 and estimated substantial tax contributions from industrial miners. Despite these benefits, the government remains cautious about fully supporting the mining sector due to concerns about electricity consumption and grid overload problems in some regions caused by miners.
President Vladimir Putin has acknowledged the challenges posed by the growing energy consumption for mining activities in Russia. In response to these concerns, the government has implemented a new mining law that allows for restrictions on mining activities in specific territories and subjects of the Russian Federation. It also prohibits electric power industry players from directly engaging in crypto mining and grants individual regions the authority to temporarily ban miners from operating. To address these issues, some of Russia’s major oil firms have initiated pilot programs with miners to utilize associated gas at drilling sites.
Despite the potential benefits of integrating miners into the energy sector, Russian authorities are navigating the delicate balance between supporting the crypto industry and addressing the challenges associated with increased electricity consumption. By allowing legal miners access to surplus energy while imposing strict regulations and potential bans in certain regions, the government aims to mitigate the negative impact of mining on power supply infrastructure. As the crypto industry continues to evolve in Russia, policymakers will need to carefully monitor and manage the energy demands of miners to ensure sustainable and efficient operation within the country’s power grid.
