Bobos & Wojaks

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The Russian Oil And Gas Sector Is Pressuring The Government To Enable It To Mine Crypto Using Natural Gas Flares

According to a report from a local media outlet, Kommersant, mining digital assets in Russia might take a new turn in the near future, as officials in the European country are exploring utilising waste natural gas for mining purposes.

 

As per the Kommersant report, it was privy to a September 7 letter between regulators in which the Russian central bank, along with other government agencies such as the Ministry of Industry and Trade and the Ministry of Digital Development, were discussing whether players in the oil and gas industry could use wasted natural gas to power data centres focused on crypto mining.

Though no clearance has been given, this is primarily due to Russia’s uncontrolled crypto mining sector. However, using natural gas to power crypto mining would be utilising a gas that is frequently unprofitable to extract, especially because it is constantly flared during oil drilling.

Russian authorities may be under pressure to reconsider their lax approach to the crypto industry in general, as many of the crypto miners who fled China have mostly relocated to Russia, Kazakhstan, and the United States, putting the country among the highest Bitcoin hash rate producers in the world.

Furthermore, pressure from oil sector actors may tighten the noose around the government’s neck. According to the article, industry participants came up with the concept of using flared gas for crypto mining, and “one of Russia’s major oil firms would like to grow its cryptocurrency mining operation.”

According to Alexander Zhuravlev, Chairman of the Commission on Legal Support of the Digital Economy of the Moscow Branch of the Russian Bar Association, Russia’s oilmen could take advantage of this by “creating data centres or providing their excess capacity as “mining hotels” for investors from China, where mining is legally prohibited.”