Russia’s cryptocurrency industry expands

13 February 2021

Russian business players have recently imported the largest-ever shipment of IT equipment into the country. The equipment is used for earning cryptocurrency – a computer process referred to as “mining,” the Russian business daily Kommersant reported.

An estimated $60m worth of equipment can purportedly support Russia’s entire cryptocurrency mining industry for three months. The equipment’s origin has not been disclosed.

Large purchases of cryptocurrency mining equipment are unusual due to risks related to cryptocurrency’s changing value. Some experts have attributed Russia’s purchase to an increasing global shortage of mining equipment and cryptocurrency’s growing value in recent months.

Since mining is energy intensive, Russia is viewed as a popular destination for mining due to its relatively cheap electricity and an estimated 60GW in excess electric power capacity.

Risks are mostly related to Russia’s regulatory uncertainty, including a vague definition of mining in Russia’s law on digital assets which came into effect on January 1. Although the law permits the use of cryptocurrency in certain transactions, it prohibits paying in cryptocurrency for goods or services.

Cryptocurrency industry representatives have called for passing a separate law to regulate cryptocurrency, which may be drafted later this year.

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