Russia has reportedly emerged as the second-largest Bitcoin (BTC) miner of all countries around the world, while the United States continues to sit at number one.
According to a new report by Russian news publication Kommersant, Russia’s first-time rise to second place comes amid regulatory uncertainty in the US that could soon shake up the rankings.
“Russia has risen to second place in the world in cryptocurrency mining. The United States remains the leader. However, the uncertainty in the regulation of cryptocurrencies there may trigger a new redistribution of the market.”
Kommersant also notes that just like in the US, Russia also faces regulatory uncertainty in crypto and the mining industry.
“However, in Russia, in general, the legal framework for miners has not yet been developed, experts emphasize. In addition, sanctions risks are growing both in relation to Russian players and their counter-parties abroad.”
The ranking is based on power usage involved in crypto mining operations, and cites data from Bitriver, Russia’s largest mining provider.
According to Bitriver CEO Igor Runets, the American mining industry is facing headwinds by rising electricity prices, reduced profitability, tax troubles, and over-leveraged mining businesses.
“In addition, the vast majority of equipment was purchased by American miners on credit, so many over-leveraged companies are in the process of bankruptcy or have already gone bankrupt.”
The Biden Administration has proposed taxes equal to 30% of the costs of electricity used in digital asset mining operations.
If approved, the tax would go into effect in 2024 and have a staggered implementation schedule with a rate of 10% in year one, 20% in year two and 30% in year three.
Bitcoin is trading for $27,353 at time of writing, down 1.1% in the past 24 hours.
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