Russia is anticipating a considerable rise in the participation of cryptocurrency miners in utilizing energy, as the Ministry of Energy predicts that the mining industry could double its current share by 2022. The department is also backing legislation to regulate the sector, with the bill expected to pass in the coming year.

Russian Ministry Of Energy Expects Increase in Electricity Used For Crypto Mining

According to estimates by Russia’s Deputy Energy Minister Pavel Snikkars, the share of cryptocurrency miners could reach between 1.5-2% of the total electric power consumption by the end of 2022, which stands at around 5%. He spoke at a virtual conference held by the business news portal RBC, where he also mentioned that the figure was approximately 1% last year.

The access to power for mining across the large nation will depend on the number and location of users who want to connect to the grid, Snikkars added. For example, in certain Russian regions, such as Murmansk, the industry can currently access unused power generator capacities.

The deputy minister explained how these resources are available, noting that decisions to build power plants are based on the needs of potential customers in the area. However, some projects may not be ready for launch in time or at all, leading to underutilized build capacity.

The expert also pointed to the problems that digital currency miners are creating for people who consume it, stressing that the power sector must guarantee reliable supply to all users.

During the event, Pavel Snikkars also discussed the efforts to regulate cryptocurrency mining as a business activity, expressing his support for a bill that was presented in mid-November to the State Duma, the lower house of the Russian Parliament.

The legislation to amend the existing “On Digital Financial Assets” law is still awaiting approval from the Duma’s Legal Department, and it has already been reviewed by the Central Bank of Russia. At the forum, the head of the parliamentary Financial Market Committee, Anatoly Aksakov, said that he anticipates that the law will be endorsed by legislators before the end of the year.

The statements by Snikkars and Aksakov comes on the heels of a report showing a rise in the demand for mining equipment in Russia in recent months. In addition to electricity consumption and mining revenues, they have also been increasing for several years prior to this year’s crypto-winter, in spite of the sanctions imposed on Russian mining companies by the Ukraine.

Do you think the crypto industry in Russia will keep expanding despite the high electricity consumption? Let us know your thoughts in the comments section.

Lubomir Tassev

Lubomir Tassev is tech-savvy writer from Eastern Europe, inspired by Hitchens’ quote: “Being a writer is who I am, more than what I do.” He is passionate about crypto, blockchain and fintech.