Government to Subsidize Crypto Mining

Russia has approved a large, subsidized crypto mining center in Buryatia, a republic in the country’s Far East.

It will open in the first half of 2023, house 30,000 mining machines, employ 100 people, and draw 100 megawatts from the power grid. 100 megawatts is enough to power tens of thousands of homes.

As part of the incentives, the mining center will pay no land or property taxes, and its income tax rate will be lower. There will be a 50% reduction in the mining company’s electricity costs.

Dmitry Khameruev, director of the Buryatia KRDV, said:

“These are zero taxes on land, property, insurance premiums reduced to 7.6%, reduced income tax rate. After connecting the resident’s facility to the unified national electric grid, the electricity tariff will be reduced by about half. For an energy-intensive enterprise, this is one of the most important support measures.”

The mining center will be built by the Corporation for the Development of the Far East, a state-owned body established in 2012 to boost economic development in Russia’s Far Eastern Federal District. The Corporation provides support for some of Russia’s poorest districts and republics, including investment projects in areas like transportation, tourism, energy, natural resources, and innovation.

Russia Has Softened Its Stance on Crypto Since The Invasion

Before the war in Ukraine, the Russian government was cold on the idea of crypto. But since the invasion of their neighbor and the ensuing sanctions, crypto’s ready-made alternative to the traditional financial system looks like a better idea.

Last September, the Russian Federation agreed to allow crypto for cross-border payments. The central bank said in a statement at the time: “It is important to emphasize that we are not talking about the legalization of cryptocurrency as a means of payment on the territory of our country.”

Deputy finance minister Alexei Moiseev reportedly said that the Bank of Russia and the finance ministry expect to legitimize cross-border payments in crypto soon.

The country also plans to start its own national cryptocurrency exchange. However, the country still maintains a broadly negative stance on technology.