Russia Trade Ministry: BTC mining consumes more power than agriculture, must be regulated

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Block reward miners account for 2% of Russia’s electricity, the country’s Ministry of Trade and Industry has claimed as it urged the government to regulate the sector, which to date, has remained a gray regulatory area.

Vasily Shpak called on the government to finally bring the miners under its purview while speaking at a recent forum convened by the ruling United Russia Party in which blockchain technology was the focus.

According to Shpak, the Deputy Minister for Trade and Industry, block reward miners now account for more electricity consumption than Russia’s agriculture industry. 

“Do you know how much mining accounts for in the overall map of electricity generation in our country? And I’ll tell you: more than 2%. This is more than the cost of electricity for agriculture. We [have to] recognize mining in this sense as an industrial activity or industry,” he told the attendees, as reported by local news outlet Interfax.

Currently, the Russian government doesn’t regulate block reward mining, making it a gray area for the operators. While this has allowed the industry to grow aggressively as the barriers to entry are lower, it has also denied the industry the legitimacy and recognition it requires to attract big investors. In addition, it has also denied the government an additional source of taxes. 

Russia’s BTC mining industry is among the world’s largest. At some point, it was the second-largest in the world after the U.S. and just ahead of Kazakhstan. It has since then dropped behind these two as well as China which has recorded a spike in mining activity in the past six months despite its tough stance against the industry.

Shpak acknowledged that there are efforts to lower the carbon footprint of digital currency mining globally and that at some point in the future, it will consume less power. 

“But, nevertheless, it is obvious that, one way or another they will consume energy, this is a technological activity,” he claimed. “Here our position is completely unambiguous: mining must be recognized, regulated and built into industrial activity” he added.

As Interfax notes, the Russian government is open to regulating block reward mining. A month ago, Prime Minister Mikhail Mishustin told State Duma that while the government is behind a ban on Bitcoin payments, it’s not against mining.

“We also think that in order to stimulate investment, primarily in fixed capital, we can discuss mining issues, this is the creation of data centers and related infrastructure,” he told legislators.

Watch the BSV Global Blockchain Convention Dubai 2022 Day 1 here:

https://www.youtube.com/watch?v=ggbZ8YedpBE

Watch the BSV Global Blockchain Convention Dubai 2022 Day 2 here:

https://www.youtube.com/watch?v=RzJsCRb6zt8

Watch the BSV Global Blockchain Convention Dubai 2022 Day 3 here:

https://www.youtube.com/watch?v=RzSCrXf1Ywc