Russia is taking big steps to establish its position in the crypto sector, especially after it found itself buried under financial penalties from other countries as a punishment for waging a war against Ukraine. Russian authorities are now speeding up the process of filling up legal loopholes associated with crypto mining, intending to make the process legitimate. Crypto mining is the task of generating cryptocurrencies by detangling complex proof-of-work algorithms on advanced computers.
Russian Deputy Minister of Energy Evgeny Grabchak batted in favour of “eliminating legal vacuum” and regulating crypto mining during the first national conference of legal crypto miners in Russia’s Irkutsk region.
“The legal vacuum makes it difficult to regulate this area and set clear rules of the game If we want somehow to get along with this activity, and we have no other options in the current reality, we must introduce legal regulation, adding the concept of mining to the regulatory framework,” Russian news agency Tass quoted Grabchak as saying.
The procedure of crypto mining is infamous for consuming huge amounts of electricity and disrupting the power supply of regions.
Several areas around the world including China, Kazakhstan, and Georgia’s Svaneti town have been crippled under power shortages caused by crypto mining.
About 60 percent of Bitcoin-mining activity is powered by fossil fuels. Even Elon Musk has voiced his concerns around crypto mining driving increased uses of fossil fuels.
To be clear, I strongly believe in crypto, but it can’t drive a massive increase in fossil fuel use, especially coal
— Elon Musk (@elonmusk) May 13, 2021
In terms of Russia, Grabchak has said that it is essential to identify appropriate mining sites in the country and manage electricity keeping crypto mining requirements in mind, especially at the regional levels.
In January this year, Russian President Vladimir Putin had noted that the country does have advantages in the mining of cryptocurrencies.
“We also have certain competitive advantages here, especially in the so-called mining. I mean the surplus of electricity and the well-trained personnel available in the country,” the 69-year old Russian President had said at the time.
As of now, it remains unclear by when would Russia tune-up its crypto-related laws to benefit the mining operations.
After China banned crypto activities last year, crypto mining picked pace in other countries like Iran, Kazakhstan, as well as Russia.
Several residents of the Irkutsk region of eastern Russia, for instance, have set-up illegal crypto mining centres in their homes, garages, and even balconies. This phenomenon is called ‘grey mining’.
As per the Irkutsk Electric Grid Company (IESC) in Russia, the electricity consumption in the region grew by 108 percent last year.
Local administrators had conducted raids in the Irkutsk region and reportedly uncovered 1,100 cases of grey mining where people illegally set up crypto mining systems in their houses and garages.
Finding alternate ways to power crypto mining operations, perhaps from renewable resources, has been emerging as a common solution from industry experts analysing the situation.
Recently, five industry experts presented their testimonies before the US House Energy and Commerce Oversight Subcommittee. All five recommended the adoption of greener energies to power crypto mining.
Some regions are already taking active measures to tackle this issue with crypto mining, in an efficient way.
Nayib Bukele, the President of El Salvador has revealed his plans of building a Bitcoin City at the base of the Conchagua volcano, in order to power Bitcoin mining with renewable energy and tackle the carbon footprint issue associated with the process.
Francis Suarez, the mayor of Miami, has also proposed setting up a Bitcoin-mining facility near a nuclear power plant in Florida. As per a report by Latest News Today, nuclear energy is on the brink of being recognised as a true environmental, social, and corporate governance (ESG) solution in terms of energy.
Bitcoin mining contributed 0.8 percent of world’s total carbon dioxide (CO2) emissions in a year, a new study by research platform CoinShares recently claimed.