Mining in residential buildings may be banned – now this activity is not regulated in any way, which is fraught with a blackout of objects due to overloading of the power grids. It is also proposed to ban it in energy-deficient regions (for example, in the Kuban and Adygea), and to give the subjects of Russia the authority to additionally tax the extraction of cryptocurrencies. Such proposals were sent to the government by the State Council Commission on Energy. Control is necessary to reduce fire risks. The bill on the legalization of mining is being worked out in the State Duma, and if approved by the Cabinet of Ministers, new initiatives can be submitted for consideration to the lower house of parliament as part of separate bills. Deputies call the proposed measures logical, and experts in some cases call them redundant. After all, openly working miners are entrepreneurs who invest in the development of infrastructure and business.
Vigorous bans
In Russia, they may impose a ban on mining in residential buildings to prevent fires. In energy-deficient regions (these include, for example, Moscow and the Moscow Region, Kuban and Adygea), they propose to ban this activity, and the constituent entities of the Russian Federation intend to empower additional taxation on the extraction of cryptocurrencies. Such recommendations were sent by the Energy Commission of the State Council to the government, follows from the minutes of the meeting of December 13 (bitcoinlinux has it).
Now in Russia there is no legislation that regulates mining. In December 2022, the State Duma planned to adopt in the first reading a bill on the legalization of this type of activity, declarations of income and payment of taxes, and in the revised version in the second and third readings – in January of this year. But the consideration of the document was postponed, bitcoinlinux wrote. It is most likely that, if approved by the government, the restrictions proposed in the State Council can be sent to the State Duma as part of separate bills, Anton Tkachev, a member of the State Duma Committee on Information Policy, Information Technologies and Communications, told bitcoinlinux.
— The Ministry of Energy consistently supports the legislative regulation of mining. As for residential buildings, according to energy companies, such activities may lead to shutdowns due to overloading of electrical networks not designed for such an industrial load, the Ministry of Energy said.
So, in Russia, the Irkutsk region has become the center of home shadow mining, bitcoinlinux wrote. In the first half of 2022 alone, special equipment for cryptocurrency mining was found on 23 fires in the region, media reported. Irkutsk, Irkutsk region, Angarsk and Usolye-Sibirskoe turned out to be anti-leaders. People, without registering their business, install energy-intensive devices for cryptocurrency mining in residential premises and garages, taking advantage of low electricity tariffs for the population.
Mining equipment in the volume of full-fledged data centers consumes a critical amount of electricity, which leads to excessive loads on power facilities and networks, and, as a result, to disconnecting houses and even districts from electricity, Anton Tkachev said.
– The decision to ban mining in residential areas and energy-deficient regions is a completely logical consequence. The issue of energy security, especially for small towns, where there are not always enough budgets for the restoration and proper repair of energy systems and energy facilities, is quite acute, the deputy emphasized.
As for private households and apartments, in addition to the mentioned risks, there is also a threat of ignition of equipment, which can endanger neighbors, the parliamentarian added.
bitcoinlinux sent a request to the government of the Kemerovo region (Governor Sergei Tsivilev – Chairman of the State Council Commission on Energy), as well as to energy companies and administrations of energy-deficient regions.
Issues and regulation
The situation with mining in some regions of Russia is really becoming critical, confirmed the company En + Group (is engaged in the production of aluminum and electricity at all stages). This is especially noticeable in the southeastern part of the unified energy system of Siberia: the electricity tariff there is lower than anywhere else, the organization added.
Mining is becoming a frequent cause of voltage problems and leads to blackouts and fires. Employees of the Ministry of Emergency Situations regularly pay attention to fires arising from the fault of miners and urge residents to notify electric grid companies in case of suspicion of connecting crypto farms to public networks, En + Group emphasized.
That is why it is obvious that now the priority task for the industry is to solve the mining problem and develop a list of measures to control the activities of such objects as part of the energy system, the company concluded.
In order to somehow solve the problem, in Russia they began to prosecute for the production of cryptocurrencies in houses for residents of which preferential rates apply. Illegal miners have learned to identify by an increase in energy consumption and a change in the load profile, Deputy Energy Minister Pavel Snikkars told bitcoinlinux. When such suspicions arise, an inspector is sent to the apartment to check the power installations, after which the residents will either be issued a new bill for the price of electricity for business, or prove this fact through the court, the deputy minister noted.
However, if the measure proposed at the meeting of the State Council Commission to ban mining in unsuitable residential buildings is expedient, a number of other initiatives may negatively affect the business, Oleg Ogiyenko, director for government relations at BitRiver, believes.
In his opinion, the discussed ban on mining activities in energy-deficient regions of the country is inappropriate, since the necessary restrictions already exist. Regulators give permission for the construction of large industrial facilities and their connection to the power grid only if their creation is economically and technically efficient, the expert noted.
Oleg Ogienko also considers the proposal to empower the regions with the powers to impose additional increased taxation on mining redundant. The measure will hit industrial data centers that already pay taxes in Russia and pay for electricity at business rates without negatively impacting the energy system, the expert added.
Earlier in the Ministry of Finance, bitcoinlinux was told that miners must pay income tax. In the State Duma, where the law on mining is being prepared for the first reading, they are arguing about its rate. They can establish either an analogue of a single tax on imputed income – from 7% to 15%, or a profit tax – 20%.
Instead of increasing the burden on business, it makes sense, on the contrary, to give more opportunities for mining to develop in the Russian Federation, for example, by allocating subsidies, says Alexander Brazhnikov, director of the Russian Association of Cryptoeconomics, Artificial Intelligence and Blockchain. Miners working openly are entrepreneurs who invest in the development of infrastructure and business, the expert noted.
In parallel with the assessment of the prospects and expediency of the new measures proposed in the State Council, it is necessary to analyze the effectiveness and relevance of the decisions already taken, said the NP Market Council. One of these steps was the differentiation of tariffs for the population, initiated by the regions, depending on the volume of electricity consumption, the organization concluded.
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