Putin’s Economic Advisor Says Bitcoin Mining Is A Key Export Trade For Russia

Russia’s growing reliance on the crypto sector is reshaping its economy, with the Kremlin now acknowledging the industry’s prowess.

President Vladimir Putin’s economic advisor, Maxim Oreshkin, stated that digital assets have become a central component of the country’s trade flows, calling for them to be included in its official balance-of-payments data. He also noted that Bitcoin mining is an “undervalued” export sector that is already shaping Russia’s foreign exchange market.

Russian Economic Advisor Calls For Bitcoin Mining to be Considered a Major Export Industry

During his speech at the ‘Calling!’ investment forum held in Moscow, Oreshkin suggested that bitcoin mining should be integrated into Russia’s economic framework. He claimed that this could address the trade sanctions that the nation currently faces by potentially stabilizing the ruble, while fostering a regulated market as the country advances its crypto frameworks.

The government views crypto assets as a major economic tool that is helping domestic companies handle trade amidst a tense environment. According to the top Putin aide, Russia’s current economic metrics are incomplete because most of its trade settlements are handled using crypto, which happens outside of conventional banking channels. 

This means that a major part of the country’s import activity doesn’t appear in the economic data, but that could change as the sheer volume of crypto transactions now affects its trade planning.

Oreshkin noted that regulators have allowed companies to pay for imports and exports with cryptocurrencies, with those flows influencing the ruble just as any other trade settlement, and could reshape the country’s foreign exchange activity. Domestic firms now rely on international partners that accept BTC and other cryptocurrencies as payment.

Russia Handles 15% of Bitcoin’s Global Hashrate, Second Only to the United States

While Russia has avoided publicly endorsing bitcoin mining for the longest time, the Kremlin now considers the industry a source of value that can balance trade during periods of economic uncertainty. Oleg Ogienko, CEO of Russian blockchain consulting firm Via Numeri, said that crypto mining already plays a significant role in the national economy. It is clear that Moscow no longer sees the sector as experimental.

Oreshkin said that miners create value because the BTC they mine circulate abroad, even though they only exist on a single network. He also added that bitcoins mined in Russia support companies that require steady payment channels.

Russia is among the largest Bitcoin hashrate providers in the world. According to estimates from Luxor Technologies, the country now handles 15.5% of the global hashrate at 150 exahashes per second (EH/s), second only to the United States, which accounts for 37.75% at 389.3 EH/s. China is the third-largest hashrate provider, with 14.06% of the hashrate and an output of 140 EH/s.

In 2023, the country mined 54,000 BTC, worth $4.98 billion at current prices, and the following year, 35,000 BTC ($3.32 billion) were produced. The YoY drop was the result of the scheduled halving process that reduced issuance by 50%.

This number highlights Russia’s expanding role in the crypto mining industry. The majority of miners are located in the country’s heavily industrialized far eastern regions, leveraging stable power and cooler temperatures. Larger mining farms use the latest hardware and cooling systems to raise their output.

Additionally, Russia’s climate conditions help keep operational costs lower. Natural cooling can reduce the load on the equipment, ensuring the miners can maintain stable operations even while the global market fluctuates. As bitcoin mining activity continues to grow and the regulatory environment evolves, the country becomes a more attractive destination for bitcoin firms.

According to reports, more than $1.3 billion has been invested in hardware, energy, and data-center infrastructure across Russia. Data shows that the revenues of local crypto miners hover around $12.9 million per day. With the mined bitcoins being sold abroad, it is not surprising that the Kremlin considers the sector an export industry, as its inflows look a lot like traditional export revenue.

At the time of writing, Bitcoin (BTC) is trading at $92,131 – down 1.26% in 24 hours.