- Russia is now offering tax breaks to those who want to invest in cryptocurrency mining.
- Since the Ukraine war and ensuing financial sanctions, the Russian government has reversed its stance on cryptocurrency.
As per an 8 February report by the local Russian media agency RBC, the state-owned Corporation for the Development of the Far East has announced the establishment of a crypto mining center in Buryatia, a republic in East Siberia and a constituent republic of the Russian Federation.
The new facility will house 30,000 mining machines, employ 100 people, and draw 100 megawatts from the power grid. It will open in the first half of 2023. Trover, Russia’s largest provider of crypto-mining co-location services, will own and operate the center.
Russia to offer subsidies with additional benefits
The mining center will benefit from a variety of incentives, including zero land and property taxes and a lower income tax rate. The mining company’s electricity costs will be cut in half.
Buryatia’s legal status as a territory of advanced development, a special economic zone incentivized to attract national and foreign investments, explains the government’s support. Moreover, the Corporation for the Development of the Far East is a subsidiary of the Ministry of Development of the Far East and Arctics, specializing in supporting investment projects.
Dmitry Khameruev, director of the Buryatia KRDV, said:
“These are zero taxes on land, property, insurance premiums reduced to 7.6%, reduced income tax rate. After connecting the resident’s facility to the unified national electric grid, the electricity tariff will be reduced by about half. For an energy-intensive enterprise, this is one of the most important support measures.”
Since the outbreak of the war in Ukraine and the ensuing financial sanctions against Russia, the Russian government has reversed its stance on cryptocurrency in general, and crypto mining in particular.
Gazprom Neft, a state-owned gas giant, entered a partnership with BitRiver in July 2022. The former would supply BitRiver it with electricity generated from an associated petroleum gas. BitRiver developed a digital infrastructure based on oil fields as part of the collaboration. Additionally, Gazprom would provide crypto mining services from flare gas.