Russian Oil Companies Propose to Mine Cryptocurrencies at Their Wells.
Companies involved in Russian oil production have come up with a project to organise cryptocurrency mining right next to the oil reserves they are exploiting. Excess gas released during oil extraction can be used to power data centres dedicated to coin minting, which would otherwise be wasted.
Ministries and the Central Bank of Russia are reviewing a crypto mining project in the Russian oil industry
Russia's oil corporations have launched an idea to start mining cryptocurrency at their extraction locations, which is currently being discussed by government agencies in Moscow. The industry proposes to generate electricity from associated petroleum gas (APG) for use in the energy-intensive process of digital coin minting.
Experts believe the project has the potential to attract overseas investors, particularly from China, where bitcoin mining has been heavily regulated this year. Industrial activity is effectively outlawed in the People's Republic, whereas mining is not illegal but is not properly regulated in the Russian Federation.
The Ministry of Industry and Trade recently requested input on the concept from the Ministry of Digital Development and the Central Bank of Russia (CBR), according to Russia's leading business daily Kommersant, quoting a letter issued by Deputy Minister of Industry Vasiliy Shpak.
His department asks the monetary authority in particular whether or not this would be a legal undertaking.
The statute "On Digital Financial Assets," which went into effect earlier this year, is the principal piece of legislation governing cryptocurrencies in Russia. However, more regulation addressing their dissemination in Russia and related operations is required. Crypto mining as an industrial activity is gaining traction in government circles, with Anatoly Aksakov, the chairman of the legislative Financial Market Committee, declaring in September that it should be registered as such and taxed accordingly.
Kommersant also quotes, a source close to the Ministry of Industry said that one of the major Russian oil firms has already started a crypto mining operation and wants to expand it. "However, because this segment is legally grey and the company is concerned about a bad reaction from the central bank, it resorted to the Ministry [of Industry], which can negotiate the risks with the regulator," a knowledgeable source told the newspaper.
According to publicly available information, only the state-owned Gazprom Neft, a subsidiary of Russian energy giant Gazprom and the country's third-largest oil producer, has a working mining project.
It was released at the company's oil field in Khanty-Mansi Autonomous Okrug, which is located in Tyumen Oblast. According to a January study, the oil giant was able to generate 1.8 BTC in a month. Gazprom Neft did not respond to a request for comment.
Do you think Russian oil companies will be allowed to mine cryptocurrencies at their wells by Moscow authorities?