(Duplicated-rejected) Russia Considering Special Energy Tariffs for Cryptocurrency Miners

Russia is considering introducing special energy tariffs for cryptocurrency mining activities amid widespread migration of miners into the country following China’s recent clampdown on the sector. 

On Wednesday October 13, Russia minister of energy, Nikolai Shulginov, had a conversation with the TASS local news agency and stated that he is examining ways to differentiate energy consumption for cryptocurrency mining.

The minister said that cryptocurrency miners should pay more than households for electricity consumption so that to maintain the reliability of the electricity grid.

"We can't let miners capitalize on the situation at the expense of low residential electricity tariffs. In order to maintain the reliability and quality of power supply, we believe it is necessary to prohibit miners from consuming electricity at residential tariffs," Shulginov stated.

He mentioned that the ministry of energy is working to come up with solutions though it is unclear of any particular directive or bill to be implemented soon.

Shulginov made such statements after the governor of Irkutsk province complained that miners are operating their mining activities in residential buildings and consuming huge amounts of electricity at retail prices. 

Earlier this week, Irkutskk governor, Igor Kobzev, wrote an official report informing vice prime minister of Russia, Alexander Novak, that electricity consumption in Irkutsk has risen by 159% since last year. Kobzev blamed illegal mining and miners migrating into the country after China imposed clampdown on cryptocurrency.

Meanwhile, Roman Zabuga, Public Relations Director at BitRiver crypto mining farm in Irkutsk, stated that cryptocurrency mining has increased alongside the rising prices of Bitcoin. He stated that the growth comes as a result of local expanding existing mining operations or beginning new ones.

“These miners are, in fact, using electricity for households, on the price that is subsidized by the regional government, for business purposes,” Zabuga stated and added that the government may introduce special tariffs for cryptocurrency miners in the future.

Miners Searching for New Locations

Following the crypto mining ban in China in June, miners have been moving out the country in search of other favorable locations. 

Nations like Russia, Kazakhstan, and the US have witnessed an increase of crypto mining activities. 

The US has even replaced China as the world’s largest Bitcoin miner, according to research conducted by the Cambridge Center for Alternative finance.

Kazakhstan attracted many miners and overtook Russia in terms of mining capacity. The country now ranks third in cryptocurrency mining volume in the world while Russia dropped down to fourth.

As a result, the Russian Association of Crypto Industry and Blockchain (RACIB) launched a project in July to attract crypto miners to the country.

Russia has many conditions that make it ideal for cryptocurrency mining. The country is ranked among the top 5 nations by electricity production.

The country has a large surplus of energy production capacity and some regions even reach 50% in surplus. While energy resources such as traditional fuels are also easily accessible across the nation, 40% of Russia’s power comes from eco-friendly energy sources like hydro and nuclear; so, the nation offers a green path for miners.