Russian Oil Companies Propose Cryptocurrency Mining at Their Wells
Companies involved in Russian oil extraction have devised a plan to arrange cryptocurrency mining directly adjacent to the oil reserves they are exploiting. Excess gas generated during oil extraction may be used to power data centers dedicated to currency minting, which would otherwise be squandered.
Russian Oil Industry Crypto Mining Project Under Review by Ministries and Central Bank
Russia’s oil firms have launched a plan to start mining cryptocurrency at their extraction locations, which is now being discussed by government authorities in Moscow. The industry proposes to generate power from associated petroleum gas (APG) for use in the energy-intensive process of digital currency mining.
Experts believe the initiative has the potential to attract international investors, particularly from China, where bitcoin mining has been heavily regulated this year. Industrial activity is practically forbidden in the People’s Republic, whereas mining is not illegal but is not adequately controlled in the Russian Federation.
The Ministry of Industry and Trade recently requested input on the proposal from the Ministry of Digital Development and the Central Bank of Russia (CBR), according to Russia’s top business newspaper Kommersant, citing a letter from the Deputy Minister of Industry Vasiliy Shpak. His department specifically asks the monetary authorities if this is a lawful activity.
The statute “On Digital Financial Assets,” which went into effect earlier this year, is the key piece of legislation governing cryptocurrencies in Russia. However, more regulation governing their distribution in Russia and related operations is required. Crypto mining as an industrial activity is gaining traction in official circles, with Anatoly Aksakov, the head of the legislative Financial Market Committee, suggesting in September that it should be recognized as such and taxed appropriately.
According to Kommersant, a source close to the Ministry of Industry disclosed that one of the major Russian oil corporations has already started a crypto mining operation and wants to expand it. “However, because this section is legally grey and the firm is concerned about a bad reaction from the central bank, it resorted to the Ministry [of Industry], which may address the risks with the regulator,” a knowledgeable source told the newspaper.