State-Backed Crypto Mining Facility
Russia has revealed plans for building a state-funded and owned digital asset mining facility in Buryatia. The country has taken a huge hit to its economy throughout the year 2022.
Now, the country is eager to bring recovery to its economy but it is not following the conventional methods to do it.
Instead of attempting to boost the economy through typical means, the country is attempting to do it through the adoption of cryptocurrency mining.
The country is very well aware of the future of cryptocurrencies and it knows that the most suitable way of acquiring them is through mining. The country has the best climatic conditions where the crypto-mining industry can thrive.
It has been suggested that a crypto mining farm with a total processing capacity of 100 megawatts shall be established in Buryatia this year.
Buryatia is an independent state which forms part of the Russian Republic, is located in Siberia, and consists of a community of Mongolic ethnicities.
Proposed Project’s Overall Cost, Capacity, and Equipment
The project is proposed to be set up by Bitriver i.e. Russian tech giant deeply involved in rendering eco-friendly hosting services. By far, Bitriver is the world’s biggest entity in offering hosting services.
It has been estimated that for building a mining facility with a 100-megawatt capacity would cost approximately 900 million in Rubles.
This means that the project’s estimated cost in terms of USD is over $12.3 Million.
The project is going to be a first-of-its-kind mining facility in Buryatia, which would be entirely funded by the Government in Moscow.
It has been told that full-scale construction work shall commence next month or at the beginning of April 2023.
The proposed mining facility will be a house to more than 30 thousand state-of-the-art most advanced mining rigs, servers, and other equipment.
On the other hand, Bitriver is a longtime partner working directly with the Russian Government.
For the purposes of putting the state-owned mining farm of the globe, Bitriver has established a subsidiary called ‘Bitriver-B’.
Though the construction work was to be commenced either at the end of this month or earlier in April, Bitriver-B has already started working.
The said company is currently laying down the infrastructure required for constructing the project in accordance with Project Completion Date.
Bitriver-B also informed that the project shall soon be able to create over 100 jobs for skilled personnel from the crypto mining industry.
Project Location and Target Cryptocurrency
For the construction of the project, an area within Buryatia was previously earmarked to be developed into a ‘Priority Development Area’.
The area, where the project is going to be constructed, is hence a special ‘regime’ dedicated exclusively to projects such as mining farms.
As per initial information regarding the proposed mining facility, the project would be aiming at minting top crypto coins i.e. Bitcoin.
Russian Government has established a partnership relationship with a local company in Buryatia namely ‘KBDV’. This very company is working under the instructions of the Russian Finance Ministry.
KBDV is responsible for bringing forth projects of mutual interest for the Russian Government as well as for other states within the Republic.
Furthermore, KBDV has been tasked to develop the Priority Area on a fast pace basis.
Incentives for Bitriver
Since the proposed mining facility is going to be a state-owned facility, hence multifarious incentives would be available to Bitriver.
For instance, the Government shall be allowing and providing its highly advanced tools and equipment to Bitriver.
In addition, Bitriver shall be exempted from payment of taxes, particularly with regard to the project.
Similarly, the requirement of insurance premiums has already been brought down to a minimum level of 7.6%.
Likewise, the electricity tariff rate shall be offered at cheap rates. It is expected that the tariff shall be as cheap as paying only half of the electricity cost.