Industrial Digital Asset Mining & Digital Assets: Russia and USA Continue Competition Race
2025-09-16 13:26
Before diving into Russian realities, I would like to briefly discuss global trends in the digital asset mining industry and its regulation.
According to the Cambridge Centre for Alternative Finance, the current global power consumption for all Bitcoin mining operations averages 21 GW, with an average annual electricity consumption of 184 billion kWh. Given this volume, the total global Bitcoin hashrate (computing power) currently stands at 920 EH/s. We can see that global digital asset mining capacity has grown by approximately 4 GW over the past year / year and a half.
According to CoinShares forecasts, Bitcoin's hashrate will surpass 1 Zh/s (1000 EH/s) by July of this year, and this figure will double by early 2027.
If we look at such an interesting indicator as the annual greenhouse gas emissions from the Bitcoin mining industry, we see that, according to the Cambridge Centre for Alternative Finance, it currently stands at 91.4 million tonnes of CO2 equivalent. Global greenhouse gas emissions by 2024 were projected to reach 41.6 billion tonnes.
What's happening in the USA, the industry's leading country?
In terms of power consumption, the volume of industrial digital asset mining in the USA, according to TheMinerMag, was approximately 6.92 GW at the end of Q4 2024. Total digital asset mining capacity in the USA, including residential one, could be estimated at 7.5-8 GW, representing 35-38% of global Bitcoin mining capacity. The largest US digital asset mining companies plan to reach 13 GW within the next three years. Clearly, digital asset mining in the US has been growing to date.
Why? Because regulation and market conditions favored it.
In the United States, cryptoasset regulation has been liberalized since President Donald Trump took office in January 2025. Specifically, the US Securities and Exchange Commission (SEC) has withdrawn or settled virtually all lawsuits against US and international crypto companies. The SEC also repealed SAB 121, which limited banks' ability to provide cryptocurrency custody services to clients. At the end of April 2025, the US Federal Reserve (Fed) repealed previously existing requirements limiting banks' participation in cryptocurrency and stablecoin transactions.
Two US states, New Hampshire and Arizona, passed laws establishing state-level cryptocurrency reserves in early May 2025. New Hampshire passed a law on May 6 that authorizes the state treasury to use up to 5% of its funds to invest in cryptocurrencies and precious metals with a market capitalization of at least $500 million (i.e., Bitcoin).
In fact, the US's liberal policy towards crypto assets has allowed the largest US investment funds to increase their Bitcoin assets under management (AUM) to $131.8 billion, and their Ethereum assets to nearly $10.2 billion as of May 30, 2025, according to data from the analytics platform CoinGlass. These assets are used to fund Bitcoin and Ethereum spot exchange-traded funds (ETFs). ETFs for other cryptocurrencies are also expected to be approved.
What's happening in Russia?
The Russian digital asset mining and digital asset industry as a whole is currently undergoing a period of integration into the state’s financial system. This is evidenced at least by the Bank of Russia's recent "Financial Market Risk Review," which for the first time identified Bitcoin as a Russian financial market instrument and showed it to be the most profitable over the past three years.
Basic country’s legislation in the cryptocurrency industry has been adopted, Federal Law 221 on digital asset mining is in effect, and the first regulatory sandbox for digital innovation in the financial market is in effect for three years. Federal laws establishing the taxation of crypto industry participants, including miners, have also been adopted. The first regulatory sandbox has outlined a closed regulatory framework for the digital currency market for the purposes of foreign economic activity. Individuals are not allowed to participate, but they can sell their crypto assets to certain sandbox’s participants. Miners, however, can become participants and provide liquidity.
Discussions are currently underway between the Ministry of Finance and the Central Bank regarding a second regulatory sandbox, which could allow super-qualified investors and a wide range of financial institutions, including professional securities market participants, to trade crypto assets. However, there are still no plans to allow ordinary Russians to trade cryptocurrency in the country. It creates a number of problems, but at the same time, in the sanctions-ridden environment, it allows for more flexible business transactions.
Russian fuel and energy companies and digital asset mining are expanding their cooperation.
Following the legalization of digital asset mining, large and medium-sized Russian oil and gas companies have shown increased interest in this activity both in Siberia and other regions of the country. This is especially true in areas lacking developed pipeline infrastructure. Thanks to their hydrocarbon and other resources, which can be further monetized through digital asset mining, Russian fuel and energy companies are already establishing joint ventures and investing in energy infrastructure (electric grids, distributed generation, gas processing plant, and other facilities), the construction of modular data centers, and the procurement, installation, and operation of digital asset mining equipment. This is undoubtedly a positive trend, as these companies operate exclusively on a legal basis, creating new jobs for local residents, developing remote geostrategic territories, and investing in capital assets.
Furthermore, there is currently a shift away from the use of Western European, American, and Japanese gas genset and turbine equipment in these projects, and a pivot toward domestic production, as well as equipment from friendly countries. This stimulates the development of competitive energy equipment production in Russia, which has an extremely positive impact on the domestic industry. In my opinion, effective digital asset mining projects by Russian oil and gas companies, at varying stages of completion, can currently be estimated at over 200-300 MW. It is inappropriate to name specific companies in this case for reasons of energy security and commercial interests.
What is the cryptocurrency market in Russia?
According to the Russian Power System Operator and expert estimates, the total capacity of all active Russian digital asset mining, both industrial and residential, currently stands at approximately 2.7 GW, with plan to reach 10 GW within the next five years.
According to pundits, Russian citizens' cryptocurrency were estimated at approximately 2 trillion rubles by the end of 2024. For legal entities, this figure could be even higher, taking into account cross-border transactions. The volume of cryptocurrency trading on various platforms globally could exceed 3 billion US dollars per day.
Problems and challenges for the Russian digital asset mining industry today:
-The issue of buying and selling mined cryptocurrency has not been fully regulated. There is virtually no verified Russian infrastructure where local miners could sell their mined cryptocurrency. The regulatory sandbox is being implemented, but not quickly. The law explicitly prohibits offering cryptocurrency purchase and sale transactions to the general public.
-In the energy sector, the negative image of digital asset miners still persists, and further bans on mining are being discussed even in regions where there is no energy shortage;
-The state does not perceive tax returns from miners; many industry players have not registered in the registry, maintained by the Federal Tax Service. It creates significant tax and other legal risks, especially by the end of the first quarter of 2026;
-The state has not yet introduced an amnesty against criminal and administrative liability for illegally imported digital asset mining equipment, which accounts for approximately 60% of the market. This also hinders the registration of such equipment and the payment of taxes to the budget;
-Due to the large-scale plans for developing generating and grid capacity outlined in the General Plan for the Allocation of Electric Power Facilities until 2042 and the Energy Strategy 2050, electricity prices for industrial consumers, including industrial digital asset mining companies, are increasing. According to documents, to modernize some of the decommissioned power generation capacity and meet growing demand, 4 GW of new generation must be built annually by 2042. Taking into account the power grid, this shortfall under current regulations amounts to 41.5 trillion rubles, which means wholesale electricity prices will at least double by 2042.
The average price for digital asset miners purchasing electricity in Russia already exceeds 4.5-5 rubles, which at the current exchange rate is 5.7-6.3 US cents per kWh. According to CoinShares, the average price for American miners is around 5 US cents.
We are witnessing the onset of intense competition in the Russian industrial digital asset mining industry with the entry of banks, financial-industrial groups, and energy companies into the market.
The keys to solving these problems and responding to challenges are:
1. Industry stakeholders must prepare proposals with draft regulatory legal acts to address these regulatory issues and begin discussing them with government authorities and the Central Bank.
2. Restructure business operations to meet legal requirements in order to have legal protection and access to debt and equity capital markets.
3. Improve the corporate governance culture to ensure qualified employees can professionally protect and promote companies’ interests.
4. Relocate from energy-deficient areas of Russian regions, or agree to work within the 4th category of electricity supply, which entails much more limitations than opportunities.
5. Build a more effective dialogue with energy companies to avoid conflicts and loss of business.
6. Invest in innovative products in the field of distributed ledger technologies; carefully invest in the development of artificial intelligence in digital asset mining data centers modernized for this purpose.