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George Spencer

October 20, 2021

Russia Consider Proposal to Mine Crypto With APG

Russia continues to show interest in bitcoin and cryptocurrencies as the asset class continues to gain mainstream adoption.

According to today’s report from local media, the Russian government is considering mining cryptocurrencies with associated petroleum gas (APG).

The country’s Deputy Minister of Industry and Trade, Vasiliy Shpak, filed a proposal with the Central Bank of the Russian Federation (CBRF) and Ministry of Digital development on September 7, to use tools in the country’s oil fields for cryptocurrency mining. 

“The implementation of the mechanism should increase the efficiency of the use of natural gas in thermal generation through hybrid modules for the “extraction” of digital currencies,” the document said.

The minister noted that the initiative originally came from local oil and gas companies.

Additionally, the Ministry of Industry and Trade, the Ministry of Digital Industry and the CBRF are currently discussing a project of Russian oil companies for the mining of cryptocurrencies in their fields.

In the proposal, the agencies noted that the government should permit the use of associated petroleum gas to power nearby data processing centers (DPC) for cryptocurrency mining.

The APG is produced as a byproduct of oil extraction, but if there is no infrastructure to put it to productive use, it is burnt off for disposal which will bring about economic loss.

The Russian government has made an effort to put the  associated petroleum gas into productive use but it lacks the necessary infrastructure to achieve that.

Meanwhile, just a day ago, Coinposters reported that the country is looking at the possibility of replacing the US dollar with “digital assets” in the long run.

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Russia’s Deputy Minister of Foreign Affairs, Alexander Pankin, noted that the move comes in line with the country’s efforts to put an end to sanctions imposed by the US government, which it does not encounter from other European countries.

Last week, Russian President Vladimir Putin aired his view in an interview with CNBC that bitcoin and other cryptocurrencies could one day be used to settle oil trades.

However, he noted that it is “still too early” to say whether they will replace the US dollar when settling oil trades.