The Russian Federation is looking to launch a crypto-mining facility worth over $12.3 million (900 million rubles) in the coming months. According to a report by local Russian media, RBC, this massive data processing center will be located in Buryatia, a Russian republic in eastern Siberia. Upon completion, the data center is expected to house 30,000 mining devices, with a projected total power consumption of 100 megawatts.
RBC also reports that the crypto mining project is being managed by the JSC Corporation for Development of the Far East and the Arctic (KRDV), a government-affiliated company under the authority of both the Russian Ministry for the Development of the Far East and the Arctic, and the President’s Plenipotentiary Representative in the Far Eastern Federal District of the Russian Federation.
According to a press release by KRDV, Bitriver-B, an operational arm of Russia’s biggest mining firm Bitriver, has begun the project’s construction, laying down some groundwork by setting up critical infrastructure and providing essential power facilities. The crypto mining enterprise is slated for completion in the first half of 2023, creating about 100 new jobs.
Established in 2012, the main objective of KRDV is to drive the economic and infrastructural development of the Russian Far Eastern Federal District by supporting investment projects across several fields, including tourism, energy, health etc.
Russia To Subsidize Its New Crypto Mining Project
The operational costs of the Buryatia-based mining farm are set to be heavily subsidized via various government support mechanisms employed by KRDV. This subsidy will be in different forms, including exemptions from land and property tax, reduced income rate tax, etc.
“The Bitriver-B company, which creates one of the most important enterprises for the digital development of Buryatia, has been provided with a wide range of government support tools. These are zero taxes on land and property, insurance premiums reduced to 7.6%, and a reduced income tax rate,” said the head of the KRDV Buryatia, Dmitry Khameruev.
In addition, the 100-megawatt mining station will pay only half of its electricity tariff following its integration with the national power grid. This high level of government support is based on the economic status of Buryatia, which is regarded as a “Priority Development Area”; thus, these are certain incentives aimed at attracting investments from local and foreign entities.
Russia Has Been Crypto-Friendly In Recent Times
After Russia invaded Ukraine in 2022, the Russian Federation has adopted a more-friendly approach towards the crypto industry.
The crypto market is currently valued at $966.001 billion | Source: TOTAL chart on TradingView.com.
Formerly known as an anti-crypto nation, Russia appears to have acknowledged cryptocurrency’s massive potential, especially as the Eastern European country is currently subject to multiple international financial sanctions by the European Union and the United States.
One of Russia’s most notable crypto-friendly moves occurred in September 2022, when the Bank of Russia announced plans to legalize the use of cryptocurrency in the settlement of cross-border transactions.