Kremlin Aide Advocates for Classifying Bitcoin Mining as an Official Russian Export

A high-ranking adviser to the Kremlin is pushing for the classification of cryptocurrency mining as an official export, highlighting the significance of tens of thousands of Bitcoins earned and the payments for imports that should be included in trade statistics.

Key Takeaways

A senior Kremlin adviser advocates for classifying Bitcoin mining as an official export in Russia.
Maxim Oreshkin highlights significant financial flows from the mining sector that impact trade statistics.
Estimates suggest that Russia could produce tens of thousands of Bitcoins annually.
Regulatory measures require miners to register, although many smaller operators evade compliance.
Investigations reveal losses in the state budget due to illegal mining activities and electricity theft.

Russian Bitcoin mining facilities framed as emerging national export sector

Proposal for Bitcoin Mining as an Export

Maxim Oreshkin, a senior official, has argued that the crypto mining sector in Russia generates considerable financial flows that are not captured in official data yet have a significant impact on the foreign exchange market and overall balance of payments. Russia legalized cryptocurrency mining on November 1, 2024. Oreshkin emphasized that the sector should be recognized as a “new export item,” which he believes is undervalued by the country. He pointed out that cryptocurrency can facilitate import payments through alternative channels, suggesting that these transactions should be accounted for in national trade measurements.

Industry estimates confirm the growing scale of Bitcoin mining in Russia. Oleg Ogienko, CEO of Via Numeri Group, indicated that the nation’s production of proof-of-work assets could potentially reach “tens of thousands” of Bitcoins in the current year. Sergey Bezdelov, who leads the Industrial Mining Association, estimated the production to be approximately 55,000 Bitcoins in 2023 and around 35,000 Bitcoins in 2024. This anticipated decline in production is attributed to the network halving, which reduces rewards for miners.

The financial implications of this mining activity are significant. Mikhail Brezhnev, co-founder of mining supplier 51ASIC, estimated that the daily earnings from mining across the country stand at roughly 1 billion rubles. He linked this income to Russia's share of the global computing power and the current value of Bitcoin. Brezhnev argued that since mined Bitcoins can be directly used for paying import expenses, it makes sense for these monetary flows to be reflected in official economic data.

Regulatory Oversight in Cryptocurrency Mining

Regulatory authorities have enforced various oversight measures. All companies and individual miners are required to register with the Federal Tax Service to operate legally, while hosting services are listed in a separate registry. Notably, household miners are exempt from registration if their electricity consumption is below 6,000 kWh monthly, but they are still obligated to report any income. Corporate mining operations face a tax rate of 25%, while individuals are taxed progressively from 13% to 22%, with non-residents subject to a 30% tax rate.

However, a recent investigation by Russian media has uncovered that illegal and semi-legal mining practices are resulting in significant losses for the state due to power theft and unpaid taxes. Reports from Ren TV indicate that many miners choose to operate without registration to evade high energy tariffs and tax responsibilities. This trend has driven a considerable portion of the mining industry underground, resulting in substantial financial setbacks for the country's budget.

While Russia has legalized industrial cryptocurrency mining and recognized registered operators, smaller-scale miners are reportedly hesitant to comply with regulations. Major companies like BitRiver and Intelion operate legally, but numerous independent miners are allegedly resorting to methods such as meter tampering, bribery, and clandestine arrangements with utility employees. Consequently, legitimate households and businesses are left to bear the financial burden of the stolen electricity.