Russia to Build New Power Plants in Siberia as Crypto Mining Demand Soars

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As the war in Ukraine continues into its 10th month, the Russian Federation recently announced a possible increase in energy production as demand from crypto miners increases.

This increase in crypto mining can be attributed to pressure from federations to legalize the use of crypto as a means of doing international trade.

Russia’s energy minister has admitted that the industry’s growing electricity needs may necessitate the installation of additional power plants in Siberia.

Russia has been the subject of both domestic and international controversy since the start of its special military operation in Ukraine.

The country, already sanctioned by the European Union and the United States, now has international assets seized and its banking system cut off from the SWIFT protocol.

Image: Wired Is crypto the answer to Russia’s woes?

Nikolay Shulginov, Russia’s Energy Minister, acknowledged the growing need for energy from cryptocurrency miners in parts of Siberia.

According to reports in local press and crypto-focused media, Shulginov is aware that more electrical installations would be needed to meet their demands.

Russia has followed India in regulating digital assets, with Moscow even considering a digital ruble as they tend to cater to the energy needs of crypto miners.

This fundamental shift in sentiment from outright banning cryptocurrency to legalizing it comes courtesy of Wests’ sanctions on the country.

Since the West has little regulation regarding cryptography and its use in international trade, Russia can use cryptography as a means of doing international trade.

However, even though the country experienced a mining revenue boom last year, it is still not sold on the idea of ​​allowing its citizens to use crypto as a form of payment. Instead, the Russian Federation is looking to use crypto to boost foreign trade.

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Shulginov pointed out that:

The position of the Ministry of Energy has always been based on the need to create working conditions for mining.

An increase in energy production just to meet crypto mining will definitely have an effect on the cryptocurrency market. In January 2022, for example, the country contributed 8.7% to Bitcoin’s total hashrate.

This could mean that more mineable cryptocurrencies would enter the market, driving prices down. But with the Federation’s outlook on crypto as a way to conduct and drive international trade, this drop might be minimal but can still be felt, especially in major cryptocurrencies like Ethereum and Bitcoin.

With both the legalization and regulation of digital assets and the increase in mining activity in the country, Russia could become a hub for Web3 and DeFi once the war on Ukraine is over and the aftermath assigned to him.

As 2023 rolls on, only time will tell if crypto will have an effect on Russia’s beleaguered economy and how the crypto market will react to it.

– Featured Image: Frugal Travelers

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