Vasily Shpak Shares His Thoughts on Crypto Mining in Russia

Crypto mining is the process of collecting cryptocurrency transactions made in the network into a blockchain, which requires energy-intensive equipment.

According to a study published in October 2021 by the Cambridge Center of Alternative Finance, the US accounts for 35.4% of the hash rate, Kazakhstan for 18.1%, and Russia for 11%.

Vasily Shpak, the deputy head of the Russian Ministry of Industry and Trade, revealed his opinion on the matter in a speech on May 27. According to Shpak, “the miners of digital currencies account for more than 2% of the total volume of electricity consumed in Russia.”

He highlighted that these numbers are higher than the cost of electricity for agriculture.

Shpak added that crypto mining is currently in what is called a “gray zone,” and is not taxed in any way. This creates risk for those who are involved in it.

The discussion about the need to legalize crypto mining in the Russian federation and bring its business into the legal field arose after the publication of a report by the Central Bank, which proposed to ban this type of business.

Shpak, however, added, Yes, most likely, less energy will be spent on mining in the future, because the world is moving in terms of digital currencies to other protocols, less expensive, which bitcoin is currently mined with.

He then also recognizes that no matter what, mining will consume energy as it is a technological activity. After his acknowledgment of this fact, Shpak stated that “mining must be recognized, regulated and built into [an] industrial activity.”