Russia’s complex relationship with digital currency took another interesting turn this week, as news reports suggest that the government is preparing to provide electricity subsidies to its domestic Bitcoin miners. The Russian news outlet Izvestiya broke the story, as Institute for Internet Development (IRI) project activities director Arseny Shcheltsin reportedly confirmed that authorities are creating a test program to provide the country’s digital currency miners with discounted electricity.
The IRI is apparently collaborating with the Russian Association of Blockchain and Cryptocurrency (RABIK) to create the program, in an effort to make it easier for those mining farms to operate within the Russian Federation. According to Shcheltsin, Russia has plenty of excess energy production capacity that is currently going unused. By subsidizing those mining costs, the government can facilitate more efficient use of that electricity, while providing incentives for increased growth in the country’s cryptocurrency sector.
The report notes that Bitcoin mining is already extremely profitable for mining farms inside Russia. While energy costs can be high, a mining farm’s revenue can far exceed those expenses. Izvestiya reports that the country’s largest mining farm uses 6 million rubles worth of energy each month, but mines roughly 20 Bitcoins each day – valued at more than 150 million rubles each month at current prices.