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- According to reports, Russia’s Bitcoin mining in 2023 brought 54,000 new Bitcoin (BTC) into circulation, generating a tax revenue of $556 million for the government.
- The country is expected to make a bold decision to permit the central bank to move digital assets overseas following the imposition of sanctions on Russian banks.
The director of the Industrial Mining Association, Sergey Bezdelov, disclosed at the just-ended Industrial Mining session of the Eastern Economic Forum (EEF-2024) that 54,000 new BTC (over $3 billion) was mined in Russia in 2023.
According to the report published by a local news website and shared by blockchain researcher Collin Brown, this incredible milestone brought in 50 billion Rubles (around $556 million) in tax revenue to the Russian government.
The chairman of the Russian Industrial Mining Association reveals that #Bitcoin miners based in Russia mined approximately 54,000 #BTC worth over $3 billion in 2023. This impressive haul generated about 50 billion rubles (around $556 million) in tax revenue for the Russian… pic.twitter.com/rE6p93KQCZ— Collin Brown (@CollinBrownXRP) September 8, 2024
Russia’s Regulatory Stance on Bitcoin Mining
Recently, CNF reported that Russian President Vladimir Putin has signed legislation to approve Bitcoin and crypto mining as part of the steps to reduce its reliance on the US dollar. According to the details, the law, which is expected to take effect in November 2024, requires that approved mining firms register through a state database to mine crypto. Small individual miners can equally mine Bitcoin without going through the official registration processes as long as they maintain their energy consumption below a certain threshold.
In terms of oversight, the Bank of Russia, the Ministry of Finance, and the selected cabinet of ministers are expected to design precise regulatory requirements in a few months.
Russia’s recent move into crypto is, according to experts, influenced by the thousands of sanctions imposed on the country for its military invasion of Ukraine. As confirmed by multiple reports, over 16,000 sanctions have been imposed on Russia by the UK, the US, and the EU, along with other countries. In a BBC report, the target has been Russia’s money, as 70% of the assets of Russian banks were frozen by the EU, with some excluded from SWIFT.
To evade some of these sanctions, the country announced in July that it had approved a new law permitting the use of crypto for international payments.
Why Russia Embracing Crypto
According to the CEO of crypto market research firm Quantum Economics, Mati Greenspan, the country’s recent crypto decisions stem from the fact that Bitcoin transactions cannot be censored or blocked by any government, aligning with our recent publication.
Previously, Russia would not want to allow that kind of transactional freedom to its citizens — but now we’re at the point that bitcoin is used so often in everyday commerce that the opportunity cost for them not to allow it is simply too great.
Russia’s central bank governor, Elvira Nabiullina, has also hinted that the supreme financial institution on the land could have the green light to move money overseas using crypto by the end of 2024.
It is worth noting that Russia has not always supported the asset class. In 2022, the Russian central bank proposed the banning of the use of crypto for transactions as well as digital asset mining. According to the bank, the asset class was a threat to the financial stability, the well-being of citizens, and the sovereignty of monetary policies.
At press time, the broad market remained down as Bitcoin declined by 5% in the last seven days and traded at $54.7k.
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