Russian Cryptocurrency Mining: Regulation, Potential, and Economic Impact

Cryptocurrency mining in Russia can be officially recognized. Anatoly Aksakov, chair of the State Duma Committee on Financial Markets, one of the authors of the document, told socialbites.ca that the draft law on the subject had been prepared in the State Duma.

what is mining

Mining involves creating cryptocurrency, such as Bitcoin, by using computer equipment. The process runs on blockchain technology, where a distributed ledger records each transaction. Miners in different locations perform calculations to build new blocks of the chain. Their task is to explore numerous combinations until a valid hash is found, which allows another block to be added. In other words, people generate many keys and test them until one fits. This requires substantial computing capacity.

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what is mining

Mining is the process of creating a cryptocurrency, such as Bitcoin, using the power of computer equipment. The system operates on blockchain technology, where each block stores information about a single transaction. Miners located in various places perform calculations to generate new blocks. Their work is to obtain a single hash, the result of transforming the block data, from millions of possible combinations from the previous block, thereby adding another block. Put simply, many keys are tried until one succeeds. This demands large-scale hardware capabilities.

Mining in Russia should be legalized and regulated, with development focused in regions that have abundant electricity. In this way, power capacity can be restored. The innovation could provide the Russian budget with an additional income stream. At present, mining is not covered by current law. Amendments to legislation on entrepreneurship and taxation are expected. The draft law is slated for submission to the State Duma by year end, according to Aksakov.

Press services of the Central Bank, the Ministry of Finance and the Ministry of Economic Development did not respond to socialbites.ca’s inquiry. The Central Bank has previously called for restrictions on the issuance and circulation of digital assets.

Currently, Russia’s Ministry of Finance is working on cryptocurrency regulation. On April 8, the ministry presented to the government a revised version of the bill On Digital Currency, noting that certain provisions have been clarified, including those related to digital mining. The first version of the law was shared with the government on February 21. It stated that using cryptocurrencies as a means of payment in Russia would remain prohibited, while digital currencies would be treated as investment tools. Transactions related to purchase or sale of cryptocurrencies would be possible only for identified customers, and crypto deposits or withdrawals would run through banks via bank accounts.

“It is advisable to consider the mining issue together with rules governing virtual asset turnover in a single package,” Aksakov told Gazeta.ru through the Rosfinmonitoring press service.

Why is a mining permit beneficial?

Yuri Pripachkin, President of the Russian Cryptocurrency and Blockchain Association, described legalization as an urgent industry priority. He argued that establishing constructive state–industry relations, especially under sanctions, can unlock billions of US dollars for the Russian economy with relatively modest investment. In 2021, Russian miners generated at least $4 billion in revenue and supported thousands of jobs. A stable load from mining in energy-rich, remote regions could help optimize electricity tariffs for households and businesses nationwide.

This would also spur growth for small and medium-sized enterprises. Home mining would not require special facilities. Problems of grid strain have been addressed in practice through differentiated electricity tariffs, Pripachkin added. He also noted that it is unnecessary to predefine surplus zones where mining is allowed. The energy sector can independently manage mining locations by adjusting tariffs, he said.

The bill received support from Chen Limin, CFO of the ICB Fund and Head of Trade Operations, IT expert Daniil Shepovalov, DRC law firm attorney Nikita Istomin, and Maria Girich of OECD RANEPA’s Center for Competence and Standards Analysis in Russia. He noted that Russia ranks third globally in bitcoin mining, with about 11.2 percent of global activity, according to the Cambridge Centre for Alternative Finance. Recognizing mining as an entrepreneurial activity, legalizing it, and creating an OKVED code would move the sector out of the gray economy and boost the budget, he said. Miners would be able to register using existing business forms—forming a company, becoming an individual entrepreneur, or opting for a self-employed status. For taxation, it will be important to specify whether taxes are due when mining is completed and deposited into a wallet, or when the digital currency is sold, Girich explained.

Clear regulatory framework

Istomin believes that regulated mining would align electricity providers’ interests, generating additional income. Regions may also benefit from legalization since miners often situate farms near electricity generation sites. In such regions, it is expected that direct and related jobs will be created and budget revenues will rise. Being a capital-intensive industry, mining can act as a multiplier for local economies.

According to Chen, proper regulation would establish clear rules for business and enable the state to govern the space, ensuring broad benefits. He emphasized that legalization should consider not only large players who might industrially exploit surplus energy, but also domestic miners who rely on mining as a main income source in tough times. Shepovalov echoed this view.

“No commitments yet”

Aksakov endorsed the ministry’s proposal to prioritize Russian-made equipment for mining whenever available. He said, “I support it.” Industry representatives, lawyers, and economists have voiced opposition. Pripachkin argued that the core idea of “whatever it takes” is not a viable approach. A flexible, growth-oriented policy should guide regulation, rather than dictating terms to the industry. Chen Limin noted that hardware mining predominantly involves mining of coins like Bitcoin and Ether, with specialized ASIC devices produced by a few companies led by Bitmain. He suggested that while prioritizing Russian-made equipment may not make much sense, creating incentives for domestic production could eventually bring similar facilities to Russia, though it would take time.