A top advisor in the Kremlin is advocating for the classification of Russia’s cryptocurrency mining as an export, emphasizing that significant amounts of Bitcoin and corresponding import payments should be reflected in the country’s trade statistics.
Summary
- Kremlin advisor Maxim Oreshkin asserts that mined cryptocurrency effectively exits the country and ought to be documented as an export, impacting Russia’s balance of payments and foreign exchange market.
- Industry experts estimate that Russian miners generated approximately 55,000 BTC in 2023 and around 35,000 BTC in 2024, with daily earnings nearing 1 billion rubles.
- Russia’s regulated mining environment includes registration and corporate tax rates up to 25%, yet illegal mining activities and power theft are resulting in billions of rubles in losses for the state.
A senior official from the Kremlin has suggested that cryptocurrency mining should be classified as an export in Russia’s official trade metrics, claiming that substantial amounts of mined digital currencies effectively leave the country without physical importation.
Kremlin aims to reclassify Bitcoin mining
Maxim Oreshkin noted that the sector produces considerable revenue that remains unrecorded in formal statistics, despite its effect on the foreign exchange market and the overall balance of payments, as reported.
On November 1, 2024, Russia legalized cryptocurrency mining. Oreshkin described the sector as a “new export item” that isn’t adequately valued, according to various reports. He contended that as cryptocurrency can be utilized for import transactions through alternative methods, such payments should be included when assessing trade volumes and currency dynamics.
Industry estimates underscore that the mining output has reached significant levels. Oleg Ogienko, the CEO of Via Numeri Group, predicted that Russia’s proof-of-work asset production could amount to “tens of thousands” of Bitcoins this year. Sergey Bezdelov, leader of the Industrial Mining Association, projected production at around 55,000 Bitcoins in 2023 and approximately 35,000 Bitcoins in 2024, attributing the decrease in miner rewards to the network’s halving.
The revenue implications are also profound. Mikhail Brezhnev, co-founder of mining supplier 51ASIC, suggested that daily mining revenues across the nation are near 1 billion rubles, correlated with Russia’s share of global computing power and Bitcoin’s (BTC) price. According to Brezhnev, since mined coins can be utilized for settling import invoices directly, there is a solid argument for including these financial movements in official statistics.
Regulatory bodies have introduced oversight regulations. Both legal entities and individual entrepreneurs are required to register with the Federal Tax Service if they mine, and hosting providers are maintained in a dedicated registry. Household miners are exempt from registration if they consume less than 6,000 kWh per month, although all earnings must be reported. Corporate mining is taxed at 25%, while individuals face progressive tax rates of 13% to 22%, with non-residents taxed at 30%.
A recent investigation by Russian media revealed that illegal and semi-legal cryptocurrency mining costs the nation millions each year due to power theft and unpaid taxes. Broadcaster Ren TV reported that many miners evade registration to escape steep electricity tariffs and tax responsibilities, consequently pushing significant portions of the industry underground and causing substantial losses for the state budget.
Despite the legalization of industrial cryptocurrency mining and the provision of legal status to registered operators, smaller miners reportedly hesitate to comply. While larger companies like BitRiver and Intelion conform to legal frameworks, numerous independent operators are charged with meter manipulation, bribery, and clandestine agreements with utility workers. Consequently, households and legitimate businesses are left to bear the costs of the stolen electricity.
