The Russian First Deputy Prime Minister Igor Shuvalov, who is the most senior member of the cabinet besides the Prime Minister, reportedly said that his government is discussing the creation of government centers for mining cryptocurrency, RBC reported last week.
Shuvalov is responsible for the Russian federal budget and economic policies. Regarding cryptocurrency mining, “we talked about the future of this sector in Russia, given that it is developing so rapidly in the world,” he said. Among the discussions he mentioned was a question of which electricity generators exist that mining centers could be placed nearby. However, he noted that it is still a discussion with no concrete project yet, adding that:
For such [cryptocurrency mining] centers to develop, it is necessary to prepare relevant legislation and its regulation.
According to Bitfury Group, Russia currently accounts for only 2% of the world’s mining capacities while China leads with 60%. The U.S. and Canada collectively hold the second largest market share with 16%, followed by Georgia at 6%, and by Europe at 5%. Bitfury was founded by Valery Vavilov, a Russian-speaking native of Latvia.
Growing Interest In Cryptocurrency Mining
This news closely followed the recent announcement from Russian Miner Coin (RMC) which plans to raise $100 million worth of cryptocurrency and start a large-scale bitcoin mining operation to compete with China. RMC is a company co-owned by one of Vladimir Putin’s advisors, internet ombudsman Dmitry Marinichev, who said that “Russia has the potential to reach up to 30 percent share in global cryptocurrency mining in the future.”
Ethereum Foundation supervisory board member Vladislav Martynov explained that “the growing interest in mining in Russia is due to the fact that there is an excess of electricity in the country and it is cheap enough.”
RMC’s presentation shows that “Russia has 20 gigawatts of excess power capacity, with consumer electricity prices as low as 80 kopeks (1.3 cents) per kilowatt hour, which is less than in China,” Fortune described.
Russia Already Preparing Cryptocurrency Laws
The Russian government has significantly changed its stance on cryptocurrency including bitcoin over the last year. A bill was introduced to ban bitcoin at the beginning of 2016, which was subsequently withdrawn, and replaced with a draft legislation to ban bitcoin mining in July. Today, however, the country is working on many bills and regulations that favor digital currency, including one that embraces Initial Coin Offerings (ICOs).
The bill which provides a legal framework for cryptocurrency including bitcoin and ether is currently being finalized, according to Elina Sidorenko who heads the working group chartered to draft the regulations.
In early June, the central bank announced that it has started developing the national cryptocurrency. Pilot projects are already underway, said Deputy Chairman Olga Skorobogatova at the time.