Demand for Bitcoin mining machines tripled in Russia during the Q4 of last year compared to the same period in 2023. According to local media outlet Prime, the surge is due to the country’s decision to legalize Bitcoin mining in 2024.
Bitcoin mining became legal in Russia in November 2024 after President Vladimir Putin signed a law legalizing the activity in late 2024. The law settled years of regulatory uncertainty around mining activity and enabled the industry to thrive in the country.
According to data from the Hashrate Index, Russia ranks second in Bitcoin mining, accounting for 16% of the global hashrate market share as of December 2024. This is significant from the 4.66% hashrate share from the Cambridge Center for Alternative Finance data.
The growth in the Russian Bitcoin mining sector is unsurprising, given its energy resources and the flexibility of its new mining law. Under the law, any individual or entity using less than 6,000 kWh per month for mining BTC does not have to register, while those using more must register.
Beyond allowing mining, the country also amended its tax law to accommodate BTC mining with a 15% tax imposed on mined assets based on their value at the time of mining. With this regulatory clarity, industry experts claim that there has been renewed interest from individuals and institutions within the country in investing in Bitcoin mining.
Serge Bezdelov, the director of the Industrial Mining Association, told Prime that Bitcoin mining has provided an opportunity for asset diversification. He said that interest in mining Bitcoin is not just from residents but also from foreign investors, including those in the BRICS countries.
Nevertheless, Russia continues to balance its need for energy security with Bitcoin mining and exercise caution regarding Bitcoin mining. Its ban on Bitcoin mining in the six North Caucasus regions and seasonal restrictions in four other regions went into effect on January 1, 2025.
Bank of Russia imposes reporting regulations on foreign transactions of crypto
Despite the permissiveness of crypto and Bitcoin in Russia, regulators still maintain a tight grip on activities, particularly foreign transactions. The Bank of Russia recently published new regulations that require the registration of contracts for foreign trade that involve digital rights.
According to the regulations that became effective on January 11, digital rights include electronic records like cryptocurrencies, digital assets, and tokenized securities. With the regulation now in place, residents of the country have to register any foreign trade contracts that involve digital assets with an authorized bank.
However, there is a reporting threshold of 3 million rubles ($29,197) for imports and 10 million rubles ($97,352) for exports. By having a threshold, the regulator aims to maintain its oversight without imposing an unnecessary reporting burden on businesses and individuals.
The regulation reads:
“Foreign trade contracts, including those providing for settlements using digital rights, must be registered with authorized banks. The thresholds for the registration of these contracts remained unchanged.”
Meanwhile, regulations, policies, and even public statements from Russian authorities over the past year highlight how the country has changed from ambivalent about crypto to finding ways to enable the industry. This is likely influenced by the plethora of Western sanctions against it due to its invasion of Ukraine and its desire to become less reliant on the US Dollar by adopting BTC. The country’s finance minister, Anton Siluanov, revealed a few weeks ago that its companies are using Bitcoin for cross-border transactions.
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