The recent moratoriums placed on cryptocurrency mining in the United States and Canada have been enforced. Russian tax benefits are now available to those who want to invest in cryptocurrency mining. The $12 million facility will be located in east Siberia and will receive direct government backing.
Buryatia (or East Siberia) is an independent republic that is part of Russia’s Federation. Local media reports that the Corporation for the Development of the Far East (which is controlled by the government) has announced the opening of a cryptocurrency mining facility in Buryatia.
The plant will be equipped with 30,000 mining machines, employ one hundred people and use one hundred megawatts electricity from the local grid. BitRiver will own and operate it. BitRiver is Russia’s largest provider of colocation services for cryptocurrency mining.
A wide variety of benefits will be available to the mining center, including exclusion from land and property taxes aswell as a reduction on the income tax rate. A fifty percent reduction in power costs will be available to the mine operator.
The legal position of Buryatia, which is that of a “territory of advanced development” — a special economic zone that is encouraged to attract national and international investments — might provide an explanation for the help that the government is providing. The Corporation for the Development of the Far East is a subsidiary of the Ministry for the Development of the Far East. It has the mission to provide financial support for different investment ventures.
The Russian government has changed its anti-cryptocurrency position, particularly in relation to mining, since the outbreak of war in Ukraine. The conflict in Ukraine led to this change. Gazprom Neft, the state-owned gas company and BitRiver, entered into a partnership in July 2022, so that BitRiver could receive power from Gazprom. BitRiver is creating a digital infrastructure at the oil fields where Gazprom supplies the flare gas needed for cryptocurrency mining. These fields are located in Russia.