In recent months, there have been moratoria placed on the cryptocurrency mining sector in several regions of the US and Canada. Russia now offers tax breaks to anyone who wish to participate in cryptocurrency mining. East Siberia's new $12 million crypto mining facility will debut with direct assistance from the government.
The state-owned Corporation for the Development of the Far East announced the opening of the cryptocurrency mining facility in Buryatia, a republic in east Siberia and a member of the Russian Federation.
The plant will employ 100 people, have 30,000 mining equipment, and use 100 megawatts of the electrical system. The leading provider of colocation services for cryptocurrency mining in Russia, BitRiver, will own and operate it when it opens in the first half of 2023.
The mining hub will benefit from a variety of benefits, including no real estate taxes and reduced income taxes. The mining operator's electrical costs will be slashed in half.
The legislative designation of Buryatia as a "territory of advanced development"—a special economic zone with incentives to draw domestic and foreign investments—can be used to justify the government's support. The Ministry of the Development of the Far East and Arctics' subsidiary, the Corporation for the Development of the Far East, focuses on assisting investment initiatives.
The Russian government has changed its mind about cryptocurrency since the start of the crisis in Ukraine and the financial sanctions that followed, especially with regard to mining. State-owned gas company Gazprom Neft and BitRiver partnered in July 2022 to supply the latter with power produced from natural gas. As a result of the partnership, BitRiver began creating a digital infrastructure in the oil fields where Gazprom supplies flare gas for cryptocurrency mining operations.