More than half of the Bitcoin network`s computing power comes from three countries: the United States, Kazakhstan, and Russia. Now the latter state is at war with Ukraine, so crypto industry observers are looking for network disruptions. This is an example of a group of miners taking a political stand. But the pools have chosen to draw a government line in the past. In October, Antpool, then the largest bitcoin mining pool with 17% of the network`s hashrate, cut users in mainland China to comply with China`s bitcoin ban. Mining consumes a lot of electricity, and although Russia has large amounts of fossil hydrocarbons that can be used to produce cheap energy, mining has yet to take hold in the country. For now, bitcoin mining in Russia remains largely stable, although the sanctions may change the calculation for miners – who regularly come into contact with exchanges and other companies associated with the traditional financial system when exchanging BTC for cash. In fact, even the new bill for international cryptocurrency payments does not seem to benefit citizens, but mainly Russian companies that export or import. By Sarthak Dogra: The country`s Finance Ministry ignores the concerns of the Bank of Russia and has introduced the country`s first bill to regulate Bitcoin and other cryptocurrencies. As the central bank continues to call for a blanket ban on cryptocurrency mining in Russia, the Russian Ministry of Finance wants to regularize the sector with the proposed new law, suggesting that Russians will be allowed to mine cryptocurrencies such as Bitcoin.

Those who pass the tests can invest “up to 600,000 rubles” (about 5.5 lakh) in cryptocurrencies each year. Those that fail will be limited to an investment of “50,000 rubles” (just over 46,000 rupees) in digital coins. Another use that seems to appear, as it could be useful, is mining with sales abroad in exchange for other currencies. However, it is not clear how they can proceed in this way by circumventing sanctions, although they are so easy to get cryptocurrencies out of Russia, they are likely to use foreign shell companies that are not subject to sanctions. Seeing the need, they decided to exploit cryptocurrencies to their advantage by using them as an international means of payment to circumvent sanctions. Thus, they are still banned for domestic use by citizens, but companies that export and import goods will likely be allowed to use them. In such a context, it is not surprising that many Russian state departments want to legalize Bitcoin mining in places where there is an abundance of cheap electricity, since its sale abroad would be legal at that time. Cryptocurrency mining should be allowed in areas with excess energy and banned in deficit areas, according to Russian officials preparing for legalization. An expert on the crypto industry recently marked the regions where Moscow is likely to approve mining and those where it is likely to ban the mining of digital currencies. Bitcoin mining produces a lot of heat, so much so that mining farms need to be cooled to avoid damaging the machines. Cooling is often associated with significant costs, especially in hot countries, but in Russia there are areas with temperatures so cold that it could simply be done by ventilating with cold air from outside. In fact, the heat generated by miners could even be used in some way to heat rooms with free waste from the BTC mining process.

He received two large crypto donations and many smaller ones, according to Meduza publisher Galina Timchenko. One of them, the chairman of the parliamentary committee on financial markets, Anatoly Aksakov, also said that the energy-intensive process should be banned in other regions experiencing electricity shortages. The deputy assured that the corresponding bill will be submitted to the State Duma in the near future and also called for the simultaneous regulation of mining and cryptocurrencies. Given the huge availability of fossil fuels that can produce cheap electricity, it`s hard to see why they previously wanted to restrict mining. In September, China stepped up its crackdown on cryptocurrencies with a blanket ban on all crypto transactions and mining, beating Bitcoin and other major coins, and putting pressure on crypto and blockchain-related actions. Word has spread that Russian cryptocurrency experts have created an efficiency standard for cryptocurrency mining in Russia that could enable this activity. Russia`s new stance on cryptocurrency mining comes after recent comments from President Vladimir Putin. Late last month, the Russian president highlighted the risks of cryptocurrency mining mentioned by the central bank, but said that the country has competitive advantages in this sector. According to Putin, Russia has excess energy that can support bitcoin mining operations, as well as a skilled workforce to carry out this task.

He then suggested that the two government agencies could agree on a regulatory agreement in Russia. Joseph Edwards, head of financial strategy at crypto firm Solrise Group, downplayed the report`s significance, saying no one outside Russia would lose sleep. Russia has been opposing cryptocurrencies for years, saying they could be used for money laundering or to fund terrorism. It finally gave them legal status in 2020, but banned their use as a means of payment. The Meduza news site also accepts donations in cryptocurrencies. Meduza was designated as a foreign agent in April, requiring it to publish a onerous disclaimer on all publications and abide by strict financial disclosure rules. Russia became the world`s third-largest crypto miner last year, according to data from the University of Cambridge. The largest crypto mines are located in the north of the country and in Siberia, where temperatures are low and there is access to cheap electricity.

BitRiver, Minespot, and BitCluster are among the largest companies in the industry. There are two assumptions: either they wanted to avoid having to increase electricity production, or they just wanted to keep citizens as far away from cryptocurrencies as possible. Moscow-based BitRiver, which operates data centers in Siberia that host bitcoin miners, said it doesn`t think a complete ban on cryptography is likely and expects a balanced stance once various ministries discuss the proposals. In Russia so far this year, there has been a lot of activity around the legal status of cryptocurrency and cryptocurrency mining. Crypto is currently not legal tender in the country. In January, Russia`s central bank proposed that cryptocurrency mining and the use of digital currency be made illegal. In a few days, the Russian government drafted a law classifying cryptocurrencies as currency. There have been persistent disagreements between the government and the central bank on this issue.

However, comments by Denis Manturov, Russia`s Minister of Industry and Trade, suggest that the two are getting closer to resolving their differences. In addition, Manturov said that sooner or later, Russia will legalize cryptocurrency as a means of payment. Reports of illegal crypto mining in prison surfaced late last week by the Russian daily Kommersant. “The potential risks to financial stability related to cryptocurrencies are much higher for emerging markets, including Russia,” the report said. “This is due to the traditionally higher propensity to save in foreign currencies and insufficient financial literacy.” “Moscow, like Beijing, still waves its sword on `crypto bans,` but Russia has never been a pillar of any facet of the industry in the same way that China has sometimes been,” he said. Mining will be allowed in areas with hydroelectric and nuclear plants, he told the crypto media, which have already been populated by cryptocurrency farms for several years. These include Irkutsk Oblast and Krasnoyarsk Krai, which have many hydroelectric power plants, as well as the regions of Tver, Saratov, Smolensk and Leningrad with their nuclear power plants. The majority of officials in Moscow also share the view that the Russian Federation should use its competitive advantages in the field of cryptocurrency mining, which were also highlighted by the Russian president. Many parts of the vast country offer both low-cost energy and a cool climate. At the same time, Russian crypto miners have also been hit by sanctions imposed due to Moscow`s invasion of Ukraine. The central bank said it would work with regulators in countries where crypto exchanges are registered to gather information on the operations of Russian customers.