Russian authorities propose Bitcoin mining using the nation’s rich oil equipment 

  • Russian officials seek to follow in the same trend as the U.S with a new crypto mining project.
  • The deputy minister of Industry and Trade has filed a proposal to use the nation’s oil equipment for mining. 

The Russian deputy minister of Industry and Trade, Vasiliy Shpak, has filed a proposal to use the oil equipment available in the country for crypto mining. The deputy minister filed the proposal along with the Russian central bank and the Ministry of Digital Industry. The enterprises proposed to begin a new project of mining crypto with associated petroleum gas (APG). The APG will help generate electricity for nearby data processing centers required to mine. 

Russian officials seek Bitcoin mining with APG

The move by the Russian government on the mining project comes amid the exodus of crypto miners from China. With the ongoing cleansing of Bitcoin mining operators from China, experts said the Russian mining project may attract investors, especially from China. However, Russia is yet to adopt the law regulating digital currencies circulation procedures. 

In a letter by the deputy minister of Industry and Trade, the executive asked the Ministry of Digital Industry and the central bank to respond on the possibility of using Russian oil equipment for crypto mining. In the letter, the minister said:

The implementation of the mechanism should increase the efficiency of the use of natural gas in thermal generation through hybrid modules for the “extraction” of digital currencies.

Furthermore, crypto miners in Russia and Belarus are looking at higher electricity tariffs. The governments are planning to differentiate the power crypto miners consume from other power-consuming groups. According to the Russian energy minister, Nikolay Shulginov, crypto miners are not to pay the same electricity tariff as households. The energy minister emphasized the reasons to differentiate electricity rates for crypto miners. 

Firstly, he stressed that the government should not allow miners to take advantage of preferential tariffs. Speaking further, Shulginov said there is a need to put a difference in the electricity consumption of miners and households. According to him, this will help maintain the reliability and quality of the power supply. 

Illegal mining led to extreme power consumption 

The Russian energy minister’s comments came after the power grid of Irkutsk Oblast experienced an increased load. The increased load was due to high illegal crypto mining in the region. The total power consumed in Irkutsk for the last four years was 5.9 billion kWh. However, 4.7 billion kWh power was consumed just in the first half of 2021 due to crypto mining. 

A directive from the Ministry of Energy and Ministry of Anti-Monopoly in Belarus has classified crypto mining activities in the same group as data centers. The issued directive further stated that information services and data processing activities would also join the group if they consume a minimum of 25 million kWh annually. 

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Bio: Ibukun Ogundare is a crypto writer and researcher who uses non-complex words to educate her audience. Ibukun is excited about writing and always looks forward to bringing more information to the world.

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