www.banklesstimes.com
HomeNewsCrypto Miners In Russia Could Face Higher Electricity Costs
Crypto Miners In Russia Could Face Higher Electricity Costs

Crypto Miners In Russia Could Face Higher Electricity Costs

Last updated 29th Jun 2022
Disclosure

Russian crypto miners may face higher electricity bills next year, but the development could allow miners to continue their trade without further scrutiny from energy providers. It is thought that energy providers may even assist them in setting up their operations in ways that place less strain on local grids.

Many have voiced concerns that the slow pace at which the government is moving towards crypto legislation would leave both the miners and power providers in limbo. But per the media outlets Kommersant and Glas Naroda, the government appears to have found a solution that does not involve any legislative changes. 

In an official statement, the government explained that it has handed local governors the power to “independently determine the maximum volume of electricity consumption” that citizens can use at “preferential” residential rates. Anyone exceeding this maximum volume limit will be forced to pay higher rates. The exact rates can be determined by the regions and power companies themselves.

1
eToro
Minimum Deposit
$200
Exclusive Promotion
User Score
10
More than 3,000 assets, including currencies, stocks, cryptocurrencies, ETFs, indices and commodities
Buy crypto, or trade cryptocurrencies via CFDs
This ad promotes virtual cryptocurrency investing within the EU (by eToro Europe Ltd. and eToro UK Ltd.) & USA (by eToro USA LLC); which is highly volatile, unregulated in most EU countries, no EU protections & not supervised by the EU regulatory framework. Investments are subject to market risk, including the loss of principal.
2
Coinmama
Minimum Deposit
$100
Exclusive Promotion
User Score
9
Easy to use tool
High profit potential
Offers Phone Support
3
Atani
Minimum Deposit
$100
Exclusive Promotion
User Score
9
Popular among traders
Fast system for trading
Popular for beginners
4
UpHold
Minimum Deposit
$1
Exclusive Promotion
User Score
7
High profit potential
Highly rated
Clear user interface
5
Coinbase
Minimum Deposit
$50
Exclusive Promotion
User Score
6
Trade and invest in over 25 cryptocurrencies
Extremely simple user interface
Over 68 million customers

The system has already been pioneered in Crimea and particularly in its largest city, Sevastopol, where citizens’ energy usage at lower residential rates is capped at 150 kWh per month.

The Ministry of Energy assured crypto users that the new legislation was not intended to raise taxes or fess, instead claiming that its purpose was solely to “combat inappropriate energy consumption.”

Regions have also been given the power to set “different tariffs for certain groups of the population.” This means to essentially ramp up electricity fees for people who the power providers have identified as crypto miners.

As for how it came to this situation, certain regions have complained to the government about escalating power usage on their grids. As mining has no legal status in Russia. This means that miners – particularly those working from home – pay the same fees as ordinary households for their electricity.

But some power companies, and regional governors, want crypto mining to be officially recognized as a form of industry or “entrepreneurship.” They also want miners to pay for electricity accordingly. If they are prepared to do so, some governors have said, they will be actively welcomed and even assisted in their efforts.

Larger crypto mining operations have happily agreed to the decree, hoping that the government might “legalize” mining in the process and provide them with less regulatory ambiguity. 

A number of industry players have been concerned that the government’s glacial pace of crypto legislation creation would leave miners and power providers in an uneasy limbo for months to come.

But it looks like the changes brought about by the work-around might not take immediate effect. The Governor of the Voronezh Oblast, Alexander Gusev, was quoted as telling citizens in the Central Russian region that he wanted to “assure” them that “such changes” will “not take place until 2023.”

“For 2022, the electricity tariffs for Voronezh residents have already been fixed, following a decision that has already been taken by the federal authorities,” the Governor added.

Other more northerly regions, which have higher numbers of miners, may not want to wait that long, however.

Ruby Layram

Ruby Layram

Ruby is a writer for Bankless Times, covering the latest news on the cryptocurrency market and blockchain industry. Ruby has been a professional personal finance and investment writer for 2 years and is currently building her own portfolio of altcoins. She is currently studying Psychology at the University of Winchester, specialising in Statistical analysis.