The Russian Federation is looking to launch a cryptocurrency mining facility worth more than $12.3 million (900 million rubles) in the coming months. According to a report by local Russian media, RBC, this massive data processing center will be located in Buryatia, a Russian republic in eastern Siberia. Upon completion, the data center is expected to host 30,000 mining rigs, with a projected total power consumption of 100 megawatts.
RBC also reports that the crypto mining project is managed by JSC Corporation for Development of the Far East and the Arctic (KRDV), a government company under the supervision of both the Russian Far East and Arctic Ministry of Development, and Plenipotentiary Representative of the President in the Far Eastern Federal District of the Russian Federation.
According to a KRDV press release, Bitriver-B, the business arm of Russia’s largest mining company Bitriver, has started construction on the project, laying some groundwork by creating vital infrastructure and providing basic power facilities. The cryptocurrency mining operation is expected to be completed in the first half of 2023, creating around 100 new jobs.
Established in 2012, KRDV’s main goal is to promote the economic and infrastructural development of the Russian Far Eastern Federal District by supporting investment projects in various sectors, including tourism, energy, health, etc.
Russia will subsidize its new crypto mining project
The operating costs of the Buryatia-based mining farm are to be heavily subsidized through various state support mechanisms used by KRDV. This subsidy will take various forms, including land and property tax exemptions, reduced income tax, etc.
“The Bitriver-B company, which is creating one of the most important enterprises for the digital development of Buryatia, has been equipped with a wide range of state support tools. These are zero taxes on land and real estate, insurance premiums reduced to 7.6% and a reduced rate of income tax,” said the head of KRDV Buryatia, Dmitry Khameruev.
In addition, the 100 megawatt mining station will pay only half of the electricity bill after being integrated into the national electricity grid. This high level of state support is based on the economic status of Buryatia, which is considered a “Priority Development Area”. Therefore, these are some incentives aimed at attracting investment from local and foreign entities.
Russia has been cryptocurrency friendly in recent years
Following Russia’s invasion of Ukraine in 2022, the Russian Federation adopted a friendlier approach to the crypto industry.
The crypto market is currently valued at $966.001 billion | Source: TOTAL chart on TradingView.com.
Formerly known as an anti-cryptocurrency nation, Russia seems to have recognized the huge potential of cryptocurrencies, especially as the Eastern European country is currently subject to multiple international economic sanctions from the European Union and the United States.
One of Russia’s most notable crypto-friendly moves occurred in September 2022, when the Bank of Russia announced plans to legalize the use of cryptocurrencies in the settlement of cross-border transactions.
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