Russia’s ministries of industry, trade and digital development are reportedly exploring the possibility of allowing some oil companies in Russia to use wasted natural gas to power data centres to mine cryptocurrencies.
This was revealed in a report on October 20 by the Russian newspaper Kommersant.
Russia, natural gas to mine cryptocurrencies
The request refers to the natural gas called ‘Associated petroleum gas’, which is found in oil fields and is not used but dispersed in the air or burned in the oil extraction process. It is a resource that is wasted and contributes to greenhouse gases.
The idea would be to use this gas to power the data centres that mine cryptocurrencies. This would have a double effect:
- finding natural energy for a notoriously energy-intensive activity such as mining;
- respecting the environment.
This decision could give a further push for regulation of cryptocurrency and mining activities in Russia.
After China’s ban on cryptocurrency mining, Kazakhstan and Russia have become popular destinations for Chinese mining companies that are leaving the country.
Mining in search of new frontiers
The ban on mining in China, which used to be home to around 45% of the world’s mining, has forced hundreds of mining companies to emigrate to other countries with sufficient energy reserves. Texas, Canada, Russia and Kazakhstan were among the first to express interest in welcoming these new digital migrants. In Texas in particular, the oil and gas industry has mobilized and is willing to make its energy infrastructure available to cryptocurrency miners.
Russia’s proposal to use natural gas follows the logic of looking for new sources of renewable energy, such as nuclear or solar energy, to overcome the problem of the enormous energy consumption of this activity.
Russia considers replacing dollar reserves with digital currencies
The Russian Ministry of Foreign Affairs has said in recent days that it is considering replacing the country’s dollar reserves with digital currencies.
Deputy Foreign Minister Alexander Pankin, in a recent interview with the Interfax news agency, reiterated how the country is looking for an alternative way to free itself from the great weight of the dollar in commercial transactions.
The purpose of these operations would be to get rid of possible sanctions that the United States government could issue thanks to the strength of its currency.
These statements follow those made by Kremlin leader Vladimir Putin, who told CNBC that cryptocurrencies have value and therefore have every right to exist.
Putin went on to say that cryptocurrencies could certainly be used to trade oil and other energy resources in the future.
In Russia, a law “On Digital Financial Assets” came into force this year, partially regulating the cryptocurrency market.
Crypto is allowed in activities such as trading, but its use is not permitted for payments. Russia has also been planning a digital ruble project for some time.