Prime reports that Russia is seeing a rise in Bitcoin-mining activity, as more and more people are turning to the crypto industry for extra income.
The report states that the demand in Russia for industrial Bitcoin-mining equipment has tripled since the first quarter of 2023.
This surge coincides with a lucrative period for Bitcoin miners, fueled by the top crypto’s significant price rally in 2024. Over the past year, institutional miners have reported substantial growth in their Bitcoin reserves, further emphasizing the sector’s profitability.
What is driving Russia’s Bitcoin mining industry?
Market observers have linked the significant surge to Russia’s regulatory adjustments, which have provided clarity for miners and facilitated the industry’s expansion while maintaining oversight.
In 2013, the Russian government introduced guidelines that legalized crypto-mining. According to these guidelines, individuals can mine without registering if their monthly energy consumption is below 6,000kWh. Over this limit, individuals must be registered as entrepreneurs to comply with the additional rules.
Tax reforms further shape the industry. Russia’s updated tax code exempts crypto transactions from value-added tax but imposes a 15% tax on mined assets.
Taxes are calculated on the basis of market values of the mined cryptos at the point of receipt. Miners may deduct operating costs from their income to arrive at a taxable amount.
Mining facilities must also report their users’ activities regularly to ensure compliance.
Furthermore, Russia’s general posture towards the top digital asset has significantly improved, with the country’s Finance Minister Anton Siluanov revealing that Russian companies are using BTC for international transactions.
Russia has a cautious approach towards the industry despite this unprecedented growth. Recently, the country imposed an energy-strapped region’s mining ban until 2031.
The restriction prohibits crypto mining and participation in mining pools within these areas, reflecting the government’s effort to balance energy consumption with economic priorities.
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