Russia’s Biggest Crypto Mining Association Criticizes Moscow’s Electricity Tariff Increase Plans
Russia’s Ministry of Energy is proposing to increase electricity tariffs for crypto miners, which could lead to a two to five times increase in costs. Currently, miners pay the same rates as residential homes since mining is not recognized as a state-recognized form of entrepreneurship. However, power providers have been granted the authority to raise miners’ hourly tariffs. The Industrial Mining Association (APM) believes this move will push miners into a “gray zone” of semi-illegality and could jeopardize Russia’s position as a global leader in crypto mining. The APM argues that legalizing the sector would allow power companies to charge higher industrial or commercial rates.
Ministry Aims to Discourage Miners from Remote Regions
The Ministry of Energy justifies the tariff increase by claiming it will discourage miners from setting up operations in remote regions, where power capacity depletion has become a problem. However, the APM Director Sergei Bezdelov argues that the proposed increase violates Russian anti-monopoly legislation and will make industrial mining unprofitable. He also warns that it could lead to an increase in illegal mining activities. Bezdelov emphasizes the importance of the crypto industry in facilitating international payments and ensuring uninterrupted imports in the face of sanctions.
The Growth and Challenges of Russian Crypto Mining
The APM estimates that the Russian industrial crypto mining market grew by 50% in 2023, securing second place globally after the United States. Bezdelov highlights that balanced regulation could generate significant tax revenue for the government. However, he cautions against illegal mining activities due to their negative impact on network stability and utility grids. While large mining companies have generated substantial revenues, most data centers are concentrated in Irkutsk Oblast in southeastern Siberia, creating tensions with power providers over fees and grid capacity.
Hot Take: Russian Crypto Miners Express Frustration Over Tariff Increase Plans
Russian crypto miners are voicing their concerns about the Ministry of Energy’s proposal to raise electricity tariffs. The Industrial Mining Association believes that this move will push miners into a gray area of semi-illegality and harm Russia’s position as a global leader in crypto mining. They argue that legalizing the sector and allowing power companies to charge higher rates would be a more effective solution. The ministry claims that the tariff increase is necessary to discourage miners from remote regions and address power capacity depletion. However, industry experts warn that illegal mining activities pose a greater threat to network stability and utility grids. As tensions rise, the future of Russia’s fast-growing crypto mining industry remains uncertain.
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