The Russian Federation is looking to launch a crypto-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 big data processing center will be located in Buryatia, a Russian republic in eastern Siberia. Once completed, the data center is expected to house 30,000 mining devices, with a total power consumption of 100 megawatts.
RBC also reported that the crypto mining project is managed by JSC Corporation for Development of the Far East and the Arctic (KRDV), a government-affiliated company under the authority of the Russian Ministry for the Development of the Far East and the Arctic, and the Plenipotentiary Representative of the President in the Eastern Federal District Far Russian Federation.
According to a press release by KRDV, Bitriver-B, the operational arm of Russia’s largest mining company, Bitriver, has started the construction of the project, laying some foundations by setting up critical infrastructure and providing essential electrical facilities. The crypto mining company is scheduled to be completed in the first half of 2023, creating around 100 new jobs.
Established in 2012, the main goal of KRDV is to promote the economic and infrastructure development of the Russian Far Eastern Federal District by supporting investment projects in several fields, including tourism, energy, health, etc.
Russia To Subsidize New Crypto Mining Project
The operational costs of Buryatia-based mining farms are set to be heavily subsidized through various government support mechanisms used by KRDV. These subsidies will be in various forms, including exemptions from land and property taxes, income tax, etc.
“The company Bitriver-B, which has created one of the most important companies for the digital development of Buryatia, has been provided with various government support tools. These are zero taxes on land and property, insurance premiums are reduced to 7.6%, and income tax rates are reduced,” said the head of KRDV Buryatia, Dmitry Khameruev.
In addition, the 100 megawatt mining station will only pay half of the electricity tariff after integration with the national electricity grid. This high level of government support is based on the economic status of Buryatia, which is considered a “Priority Development Region”; thus, this specific incentive is aimed at attracting investment from local and foreign entities.
Russia Is Crypto-Friendly In The New Era
After Russia invaded Ukraine in 2022, the Russian Federation has adopted a more friendly approach towards the crypto industry.
The current crypto market is worth $966.001 billion | Source: TOTAL chart on TradingView.com.
Formerly known as an anti-crypto nation, Russia seems to have recognized the massive potential of cryptocurrency, especially as an Eastern European country currently subject to international financial sanctions by the European Union and the United States.
One of the most famous crypto-friendly moves in Russia happened in September 2022, when the Bank of Russia announced plans to legalize the use of cryptocurrency in the settlement of cross-border transactions.
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