Russia’s central bank has been primarily against the use of cryptocurrencies in the country, however, recent geopolitical escalations due to the war in Ukraine have led Russian policy makers to consider using crypto for cross-border payments. When the central bank was of the opinion that cryptocurrencies are a no-fit in the Russian economy, policy makers did allow crypto mining. The country which was previously progressing to become a crypto mining hub given its cheap energy prices, the trend seems to be deteriorating.
A recent report published in Russia researched and observed the figures of Bitcoin mining, average revenue, effect on the national economy, etc. As per the report, during 2017-2021, the revenue from Bitcoin mining in the country continued to increase about 18 times from 7 million rubles (below $114 million at current rates) in 2017 to 128 million (over $2 billion) rubles in 2021.
However, 2022 hasn’t been that profit-yielding despite a good start. In the past eight months, the bitcoin mining revenue in the country has dropped about 57 billion rubles ($929 million), making the second quarter the worst in over a decade, as per expert opinion.
In January, the share of Russia in controlling the monthly global hashrate used to be 4.66%. Still, it has declined in the past months due to its sanction by the US in response to the ongoing tension and war between Russia and Ukraine. Considering all of it, the annual turnover of Bitcoin mining in 2022 is estimated to be around 85.9 billion rubles (less than $1.39 billion).
Timofey Semenov, CEO of Intelion Data Systems, said the increasing potential of bitcoin mining in Russia could considerably impact the nation’s economy. It could also help the country strengthen its position in the IT sector by helping them deploy its own IT infrastructure and attract investment in its energy-rich regions.
Analysts suggest that the mining activities in Russia during the past five years combined have shown significant results in terms of growth dynamics nonetheless. The country 2017 has recorded fast-paced increasing revenues with the increasing popularity of the business irrespective of the ups and downs in the crypto market.
Studies previously have also revealed that the centers mining digital currencies use about 20 times more electricity than five years ago, and the total energy consumption by the sector has reached that of agriculture.