Mining in Russian: How Cryptocurrency is Mined in Conditions of War and Sanctions 0 23

Dmitry Guzenko, an expert, explained to the business channel RBC how the cryptocurrency mining market operates in Russia after its legalization, how long it takes for mining projects to pay off, and who invests in them.

— In Russia, amendments to the law "On Digital Financial Assets" were adopted in the fall of 2024, which introduce regulation of the mining market. How is this sector developing today?

— Indeed, mining in our country existed without regulation until January 1, 2025, when the amendments to the law came into effect. That is, mining (the process by which computers solve complex tasks to confirm transactions in the cryptocurrency network and create new blocks in the blockchain, during which the miner receives cryptocurrency) existed, but this activity was not controlled in any way. Meanwhile, this sector has turned into a serious industry. Thus, by the end of 2023, the Association of Industrial Mining estimated the capacities of this market in Russia at 1.5 GW, and domestic miners mined about 54,000 bitcoins worth $3.5 billion that year.

Legalization was necessary for the market: it allowed for the establishment of clear rules of the game.

Currently, mining is taxed. Companies must pay 25% corporate income tax, while individual miners pay 15% personal income tax. Individual entrepreneurs and legal entities, as well as individuals who mine digital currency consuming more than 6,000 kWh per month, must register in a special registry maintained by the Federal Tax Service (FTS). In addition, the government has defined where mining can and cannot take place. A ban has been imposed in the entire Irkutsk region, Dagestan, North Ossetia, Ingushetia, Chechnya, Kabardino-Balkaria, Karachay-Cherkessia, the Donetsk People's Republic, the Luhansk People's Republic, Zaporizhzhia and Kherson regions, as well as in certain parts of Buryatia and the Transbaikal Territory. The reason for the ban is the potential shortage of electricity in these regions.

For equipment vendors, the main result of the introduction of new tax rules and its regulation in general has been a change in the class of investors: if previously they were mostly individuals, now they are increasingly corporate clients.

— What type of business is the main consumer in your segment?

— The market is interesting to investors from various sectors, from small companies to federal-level players. Of course, industrial companies mainly purchase equipment, but there are also partners from the trade sector, film industry, and IT.

Mining provides an opportunity for income diversification for almost any enterprise. Of course, this investment option is most attractive for legal entities with access to cheap electricity. However, today, against the backdrop of the constant rise in the value of major cryptocurrencies, the situation is such that mining can generate income even at standard electricity rates.

— How suitable is the current moment for entering mining from scratch?

— A few years ago, miners recouped their investments in literally five to six months and then started making a profit. Now, the payback periods in our sector are two to two and a half years. This is longer than it was before, but still better compared to other types of business, such as investments in commercial real estate, which pay off in eight to ten years.

The situation in mining has stabilized. Moreover, the extremely high profitability scared away many large players who thought that this market was destined for inevitable collapse. Now the market has become more predictable. The era of lone enthusiasts has passed, and large corporations with significant funds have arrived.

— How much does it cost today to enter mining as a business?

— According to our estimates, it makes sense to invest from 3 million rubles and above. This amount allows hiring an accountant and a financier. Now, a miner must submit a lot of reports, and at least two people are needed to manage the project. At the same time, this business is good because it is easy to scale — reports and operating principles remain the same, only the numbers and capacities grow.

— What challenges do market participants face today?

— The main challenge is, of course, the fluctuations in cryptocurrency prices. According to an MTS report, 90% of the existing capacities in the country currently mine bitcoin (BTC). It remains the most liquid cryptocurrency, the easiest to sell, and less volatile than other cryptocurrencies. However, even the bitcoin rate shows significant changes. For example, in early April 2025, it was around $75,000, while in early August, it exceeded $120,000. Large institutional players, primarily from the USA, can influence cryptocurrency prices with their actions. This, in turn, determines the profitability of mining projects at entry and exit points of investment. But if a businessman engaged in mining knows how to wait and is not prone to emotional decisions, sooner or later he will find the moment to secure profitability. Historically, the bitcoin rate has been steadily rising.

Another risk is the exchange rate of the ruble against the dollar. A miner pays for electricity in rubles, while income is essentially in foreign currency. It turns out that a miner, like any exporter, does not benefit from a cheap dollar and an expensive ruble. Thus, the strengthening and weakening of the national currency also affect profitability in our sector.

Finally, regulation plays a significant role. For example, previously some miners were located in regions where this type of activity was banned starting in 2025. Mining was popular in the Irkutsk region, Buryatia, and the North Caucasus Federal District. Now these companies incur additional costs for transporting equipment, finding new sites, and connecting.

— What development scenarios do you foresee for the industry in the next two to three years?

— I am confident that mining in Russia will develop. It is interesting to investors, energy producers, and the government. The former make profits, the latter have stable consumers always ready to take excess energy, and the government sees growth in tax revenues and an increase in gross domestic product.

At the same time, the government fully controls this sector today. All legal entities and individual entrepreneurs mining cryptocurrency are required to register as miners with the FTS. After that, they must report on the mined assets, wallet addresses, and provide other identifiers. Strict reporting on electricity consumption is in place.

— What potential advantages can the development of mining bring to Russia?

— According to Rosstat, the volume of electricity generation in Russia for 2024 amounted to 1.209 trillion kWh, while consumption reached 1.192 trillion kWh. These are huge figures, and electricity consumption fluctuates depending on the time of day, weather, and other factors. Mining can help effectively utilize excess energy resources.

Funding for projects related to mining can be attracted not only from Russia but also from abroad.

According to a study by the International Wealth organization, in 2025, Russia ranked third in the hash rate (a measure of computational power used for mining and processing transactions in the blockchain) of cryptocurrencies with a rate of 11.5%. The USA ranked first with a share of 37.8%, and Kazakhstan was second with 13.2%. China, once a leader in this market, is now absent from official reports following the ban on mining in 2021. The USA continues to experience a boom in mining using associated gas obtained during oil extraction. Large corporations are investing billions of dollars in such projects. There are currently difficulties with importing equipment due to new tariffs, but the sector is still growing.

Our country has great prospects in the mining market. We have a lot of available electricity, access to equipment, clear regulation, and we see a willingness from businesses to invest in mining.