Monday, 27 March 2023

Crypto Mining News

Russian government subsidies crypto mining facility in Siberia

Russian government subsidies crypto mining facility in Siberia

The crypto mining industry has faced moratoriums in some parts of the U.S. and Canada in recent months. Now, Russia provides tax incentives for those who want to invest in crypto mining. The new $12 million crypto mining center will open in East Siberia with the direct support of the government.

According to local media, the state-owned Corporation for the Development of the Far East announced the launch of the crypto mining center in Buryatia — a republic in East Siberia and a part of the Russian Federation.

The facility will possess 30,000 mining machines, hire 100 workers and consume 100 megawatts from the power grid. It will open in the first half of 2023 and be owned and run by the private operator, the largest crypto-mining colocation services supplier in Russia, BitRiver.

The mining center will enjoy a broad set of incentives, from zero land and property taxes to a lowered rate of income tax. The electricity prices will be cut by half for the mining operator.

Related: Russia’s Gazprombank recommends slow CBDC rollout fearing loss of income

The government support can be explained by the legal status of Buryatia, which comes as a “territory of advanced development” — a special economic zone incentivized to attract national and foreign investments. The Corporation for the Development of the Far East is a subsidiary of the Ministry of the Development of the Far East and Arctics and specializes in supporting investment projects.

Since the outbreak of the war in Ukraine and the financial sanctions that followed it, the Russian government made a U-turn on crypto in general and on mining in particular. In July 2022, a state-owned gas giant Gazprom Neft entered into a partnership with BitRiver to provide it with electricity generated from the associated petroleum gas. As part of the collaboration, BitRiver started developing a digital infrastructure based on the oil fields in that Gazprom provides crypto mining services from flare gas.