- Russia earned $555 million in taxes from $3 billion BTC mined last year in the wake of Western sanctions
- This remarkable achievement prompted Mara’s Thiel to call Bitcoin and mining a “national security issue.”
Fred Thiel, CEO of Bitcoin miner Mara, is in the news today after claiming that mining and BTC’s strategic reserves are national security interests. He made the comments after it was revealed that Russia had mined $3 billion in BTC last year amid Western sanctions.
“Just shows that #bitcoin is a matter of national security, both bitcoin mining and strategic reserve. Russia Mined More Than $3 Billion in Bitcoin Last Year Amid Sanctions.”
US vs Russia in the crypto space
According to Russian outlet IzvestiaThe above information was revealed on Wednesday by Sergey Bezdelov, director of the Russian Industrial Mining Association, during a mining session. He also noted that the government earned $555 million in taxes from BTC mining taxes in 2023. He said:
“In 2023, 54,000 Bitcoins were mined in Russia. According to our estimates, the annual tax increase amounts to 50 billion rubles. Now there is a law about the correct “soft” regulation. 50 billion – under current scenario conditions. And new investors will come.”
Although this figure is less than 1% of Russia’s gross domestic product ($2.27 trillion), it points to a notable source of tax revenue. Especially considering the country’s economic problems due to Western sanctions.
To its credit, despite regulatory challenges, the United States has made some progress after approving Spot ETFs (exchange traded funds) for Bitcoin and Ethereum. [ETH]. In July, Donald Trump promised to create a national strategic reserve for BTC if he is elected president. The former president too reconfirmed his commitment to making the US the world capital for BTC and crypto.
On the contrary, Russia recently passed crypto mining laws and established an experimental framework to boost international trade using crypto. In August the government revealed plans for stablecoins pegged to the Chinese Yuan and BRICS currencies to power this bold crypto plan.
The Russian crypto plan and its obstacles
In addition, it has set up two crypto exchanges in St. Petersburg and Moscow to allow selected companies and individuals to conduct trade and settlements via cryptocurrencies. The country’s crypto hub is the solution to Western sanctions, which have reportedly hit the economy by slowing cross-border payments and trade.
According to the latest Chainalysis report, the Russian government could use several crypto exchanges, such as Exved and Garantex, to circumvent sanctions. However, the company noted that large-scale use at national and international levels could face several challenges, including sanctions on associated wallet addresses.
Part of the report read,
“Sanctions evasion on a large scale remains highly unlikely, as total Russian foreign exchange reserves stand at just under half a trillion dollars… Wallet addresses associated with CEXs, mining services and other entities in the chain could be identified, attributed and potentially sanctioned. ”
It remains to be seen how Russia will overcome these challenges as it aims to eclipse crypto mining in the United States.