Russian crypto industry rapidly expanding

The number of crypto mining companies has risen by 15% since the beginning of the year

Russia's crypto sector is on the rise: the number of mining businesses is rapidly increasing as well as the number of citizens who own cryptocurrency. The country has every chance to become a major crypto mining destination thanks to cheap electricity, but delays in adopting corresponding legislation entail a loss of investments, warns the local crypto and blockchain association.

The Russian crypto industry is developing at a fast pace, despite the lack of comprehensive regulations, considers The Russian Association of Cryptocurrencies and Blockchain (RACIB) reports that the number of crypto mining companies increased by 15% to a total of 75,000 in the first half of 2018. The mining industry already employs 350,000 people, says RACIB's President Yuri Pripachkin, adding that Russia currently accounts for about 6% of the global mining market. This is 1% more than a year ago, while the US and Canada are stuck to the leading positions.

According to the Morgan Stanley report cited by Pripachkin, the top five countries by trading volume of cryptocurrencies in H1 2018 were Malta, Belize, the Seychelles, the US and South Korea, and by the number of crypto exchanges – the UK, Hong Kong, the US, Singapore and Turkey. In Russia, the number of cryptocurrency owners has increased from 2,5 to 3 million this year. Nevertheless, RACIB's president considers that Russia actually risks missing the opportunity to become a digital financial leader, as the delay in developing digital money sector ''means a loss of investments of up to 1 trillion rubles (about $15 million) a year''.

Russian State Duma is expected to adopt bills legalising crypto activities during autumn session. Photo:

Meanwhile, the average salary in the industry has fallen by 40% from the record levels registered in 2017, although it remains relatively high for Russia (10 times higher than the country's average for certain professionals). Local job search platforms report strong demand for crypto and blockchain experts, including PR specialists, software developers and project managers. In order to meet the demand for qualified professionals, Russian universities have launched educational courses and postgraduate programmes on cryptocurrencies and blockchain technologies.

Russia is expecting the final adoption of three bills aimed at legalising crypto transactions and activities. The adoption has been postponed until the autumn session of the State Duma, the lower house of the Russian parliament.

By Anna Litvina