Cryptocurrency mining as an emerging industry: Prospects for the Russian Arctic

Abstract

This article explores the potential of the emerging cryptocurrency mining industry in contributing to the development of the Russian Arctic. The study employs an original approach that emphasizes gross regional product (GRP) growth, digital and high-performance computing development, and the need to maintain a balance between ecological sustainability and economic progress. The novelty of this research lies in its evaluation of the risks and benefits of crypto mining from the perspective of regional economies in the Russian Arctic. The goal of the study is to conduct a comprehensive assessment of the conditions, opportunities, and consequences associated with the development of crypto mining in the Russian Arctic, in line with principles of sustainable and balanced territorial development. The methodology combines regulatory analysis, statistical methods, balance sheet analysis, comparative international review, and input-output modeling. The findings indicate that crypto mining has attained strategic significance for the Russian economy, with its advantages outweighing the associated risks. Drawing on international experience, the study highlights that unregulated crypto mining can hinder economic growth, regardless of resource availability. In Russia, regulatory mechanisms—including state registration, taxation, and tariff oversight—are implemented at the federal level, while regional initiatives remain underdeveloped. The centrally driven model of industrial crypto mining in the Russian Arctic faces challenges, including the absence of pricing mechanisms for energy consumption during the heating season and pressure on the fragile drivers of economic growth in resource-dependent regions. Nonetheless, the Russian Arctic offers favorable conditions for crypto mining, such as surplus electricity supply, low tariffs, cold average annual temperatures, available production infrastructure, access to associated petroleum gas, and renewable energy potential. A key conclusion of the study is that industrial-scale crypto mining—particularly by registered individual entrepreneurs and small to medium-sized enterprises—holds significant promise in the Russian Arctic. The article presents practical policy recommendations aimed at enhancing regional initiatives in developing the crypto-mining industry, and at strengthening regulatory and oversight tools at the regional and local levels. A promising direction for future research is the factor analysis of regional economic growth models in the Russian Arctic, incorporating indicators of crypto mining industry performance.

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