BitRiver: Russia rises to second place in cryptocurrency mining

Based on the first quarter of 2023, Russia for the first time ranked second globally in the volume of capacity devoted to mining — about 1 GW. The «Коммерсант», citing data from the BitRiver data-centre operator, said this.

According to the company’s estimates, the leader remains the United States with 3–4 GW of mining capacity.

The top 10 also include:

• Persian Gulf countries — 700 MW;
• Canada — 400 MW;
• Malaysia — 300 MW;
• Argentina — 135 MW;
• Iceland — 120 MW;
• Paraguay — 100-125 MW;
• Kazakhstan — 100 MW;
• Ireland — 90 MW.

In December 2022, according to the Cambridge Centre for Alternative Finance (CCAF), Russia held fifth place in Bitcoin hash rate share, at 4.7%. At that time it trailed the United States, mainland China, Kazakhstan and Canada.

BitRiver experts linked the positive momentum to the introduction of licensing of mining activity in Kazakhstan and its ban in China.

They added that, despite leading positions, market development in the United States has been slowed by rising electricity prices, shrinking mining profitability and the removal of tax incentives. Moreover, equipment was often purchased by American miners on credit, hence many companies found themselves in bankruptcy proceedings.

Russia also continues to face factors that restrain the development of the mining industry — lack of regulation and rising sanctions risk. The BitRiver group itself was sanctioned by the US Treasury in April 2022.

Recall, a draft law regulating mining has been registered in the State Duma since mid-November 2022. It obliges individuals and legal entities to report to the tax authorities about mined cryptocurrencies, with the address to which they are credited.

The document also imposes a ban on advertising digital currencies or offering them in any form to an unlimited audience.

In March 2023, the Russian Finance Ministry added to the mining regulation bill a provision on criminal liability for failing to declare digital assets.