Intelion Data Systems, a major Russian importer and distributor of mining hardware, has reported that the Russian Federation has the potential to increase its leadership in the field of crypto mining. As countries such as the United States, Canada, and China begin to toughen policies towards the industry, there may be a major migration of miners to Russia. This migration could increase Russia’s share in the global Bitcoin hashrate to 18%, with electricity consumption amounting to 3.95 GW and an average cost of 128 billion rubles (almost $1.7 billion).
CEO of Intelion Data Systems, Timofey Semyonov, believes that Russia has the potential to change the existing hierarchy of the global crypto mining market due to its low cost of electricity, reserves of free capacities, and developed infrastructure in many regions. He also highlighted the efforts of Russian companies to expand their business and the government’s support for the industry.
Russia Poised to Benefit from Global Crypto Mining Growth
The crisis in the banking sector in the U.S. and Europe, which is just beginning, is expected to lead to a growing demand for bitcoin as a hedging tool and interest in crypto among traditional financial institutions. This should result in increasing global mining volumes and create favorable conditions for investment in Russia’s crypto mining industry. However, Intelion experts warned that mining in Russia needs to become a legal business activity with clear rules of the game to create a favorable investment climate. While lawmakers are yet to adopt the long-awaited mining legislation, official statements in Moscow have indicated that Russian authorities intend to utilize what President Putin described as Russia’s competitive advantages as a mining hotspot.
As of January 2022, Russia accounted for nearly 4.7% of the global hashrate, ranking fifth among major mining destinations. However, with the potential migration of miners, Russia has the opportunity to move up the ranks and become a leading player in the global crypto mining industry.