The Russian Federation plans to start operating a cryptocurrency mining plant worth $12.3 million (900 million rubles) in the upcoming months. According to a report by local Russian media, RBC, this enormous data processing facility would be situated in Buryatia, a Russian republic in eastern Siberia.
The data center is anticipated to contain 30,000 mining devices once it is complete, using a predicted 100 megawatts of power overall.
The JSC Corporation for Development of the Far East and the Arctic (KRDV), is a government-affiliated business that operates under the supervision of both the Russian Ministry for the Development of the Far East and the Arctic and the President’s Plenipotentiary Representative in the Far Eastern Federal District of Russia, is managing the cryptocurrency mining project, according to RBC.
Bitriver-B, the operational arm of Bitriver, the largest mining company in Russia, has reportedly started the project’s construction and laid some groundwork by establishing crucial infrastructure and providing necessary power facilities, according to a news release by KRDV. In the first half of 2023, the crypto mining business is expected to be finished, adding roughly 100 new jobs.
KRDV was founded in 2012 with the primary goal of promoting investment projects in a variety of industries, including tourism, energy, health, and others, to advance the economic and infrastructure development of the Russian Far Eastern Federal District.
Government plans to support the crypto mining center
KRDV plans to extensively subsidize the Buryatia-based mining farm’s operating costs through a number of different government support programs. This assistance will take many forms, such as decreased income tax rates, land, and property tax exemptions, etc.
According to Dmitry Khameruev, the head of the KRDV Buryatia,
“The Bitriver-B company has been given access to a wide range of government support instruments, helping it to establish one of the most significant enterprises for Buryatia’s digital development. In addition, insurance rates have been lowered to 7.6%, and the income tax rate has been lowered.”
Additionally, after being integrated into the national power grid, the 100-megawatt mining station will only be required to pay half of its electricity tariff. These significant levels of government assistance are predicated on Buryatia’s economic standing as a “Priority Development Area,” and they serve as incentives to draw in domestic and international investors.
The Russian Federation has changed its stance regarding cryptocurrency since it invaded Ukraine in 2022.
Russia’s crypto-friendly initiatives
Despite having a reputation for being anti-crypto, Russia today seems to see digital currency’s enormous potential, especially given that the European Union and the United States have several banking sanctions in place against the Eastern European nation.
When the Bank of Russia revealed plans to allow the use of cryptocurrencies to settle cross-border transactions in September 2022, it was one of Russia’s most prominent crypto-friendly initiatives.
