Russia launches BRICS mining infrastructure project

Russia’s largest data center operator BitRiver has partnered with the Russian Direct Investment Fund to build mining and AI computing facilities across BRICS countries. The companies announced their plans at the BRICS Business Forum in Moscow on October 18, 2024, according to an announcement on BitRiver website.

The partnership aims to expand Russia’s share of the global computing market through the construction of high-performance data centers equipped for cryptocurrency mining and artificial intelligence workloads.

BRICS is an economic alliance of Brazil, Russia, India, China and South Africa, representing more than 40% of the world’s population and a quarter of global GDP. In 2024, the bloc expanded to include Egypt, Ethiopia, Iran, Saudi Arabia and the UAE.

“We will focus on creating a mining-based infrastructure – building data centers and connecting them to the necessary power sources to enable AI project deployment and development across the country,” BitRiver CEO Igor Runets said. said according to the announcement.

BitRiver currently operates 21 data centers in Russia with 10 more under construction. The RDIF, Russia’s sovereign wealth fund established in 2011, has invested more than 2.2 trillion rubles ($22.7 billion) in more than 100 projects.

The companies cite a global shortage of energy-intensive data center capacity as a key driver for expansion. The initiative aligns with Russia’s effort to strengthen its position as the world’s second largest crypto mining market after the United States.

“Mining is not only a foundation for digital economy. As Russia overtakes the United States in mining, it means our country cannot be ignored,” Runets said. “This brings economic growth, settlement liquidity with our partners and creates skilled jobs nationwide.”

“Computing power development for AI implementation remains a priority for Russia and BRICS partners,” RDIF CEO Kirill Dmitriev said, according to the announcement. “Joint use of high-tech infrastructure will enable members to reduce costs, reduce foreign technology dependence and control critical data.”

Russian Mining Regulatory Environment

The expansion follows Russia’s mining regulation law of August 2024, which established a legal framework for industrial mining operations. The law requires miners and data center operators to register in a government database, report operations and meet regional energy consumption limits.

BitRiver’s website details the mining laws that created two regulatory frameworks. The first governs experimental legal regimes for crypto companies in Russia. The second regulates mining and cryptocurrency operations nationwide. The Bank of Russia supervises these regimes in coordination with the Ministry of Finance, Federal Security Service and Financial Monitoring Service.

The law requires commercial miners and data center operators to register in a government database, report operations and meet regional energy consumption limits. Individual miners can operate without registration if their energy consumption remains below government-set limits. The government can limit mining in energy-deficient regions and adjust power supply conditions for previously connected mining operations.

The legislation also set guidelines for foreign partnerships and cross-border operations, allowing Russian-mined cryptocurrency for international settlements. The legislation prohibits mining companies from combining operations with power transmission, dispatch control or electricity generation businesses. Pool operators and data center providers must identify their customers and report suspicious transactions to authorities, with the Federal Tax Service, Financial Monitoring Service and Federal Security Service overseeing all operations.

Broader implications

The expansion of the data center is in line with BRICS members’ strategy to build sovereign technology infrastructure. BRICS countries are actively developing alternative systems to reduce dependence on Western suppliers while maintaining control over critical computing resources and data. According to an article by Nathan Lewis for Forbes, Russian banks have already started developing independent infrastructure, with Sberbank launching digital asset projects in late 2022.

“We believe that creating an independent BRICS payment system is an important goal for the future, which will be based on the latest tools such as digital technologies and blockchain,” Kremlin aide Yury Ushakov told Russia’s Tass in March – news agency said. 5, 2024.

What this means for Bitcoin

“For us, the expansion of crypto mining by these heavyweights signals bitcoin’s ever-growing global adoption. It opens new opportunities for liquidity and financial inclusion in BRICS regions,” Solv CEO Ryan Chow said in an e- post statement said.

According to blockchain.com data, Bitcoin network’s total hash rate reached 723.63M TH/s in October 2024, up from 450M TH/s year-over-year, marking an increase of 55%. Daily mining revenue stabilized at about $30.78 billion, while network problems hit 93.02T, up from 62T last November, showing massive deployment of new-generation mining hardware from large-scale institutional entry and growing competition.

“As more infrastructure is established, it has the potential to bring a wave of new participants into the Bitcoin ecosystem, potentially driving greater engagement in Bitcoin finance and the broader blockchain ecosystem,” Chow concluded.