ViaBTC | Crypto Miners: Where Do Countries Stand on Crypto Mining in 2022?
This year, the crypto market kicked off to a rough start. Meanwhile, multiple big-name crypto institutions “crashed” recently, which led to a new round of market panic. According to CoinGecko, the current total market cap of cryptocurrencies is less than $930 billion, which has shrunk by nearly two-thirds from its peak in November 2021.
As the market continues to fall, Bitcoin, the leader of all cryptos, is now worth around $20,000, a decline of over 58% during the year, which overwhelmed many BTC miners. As ViaBTC’s official website indicates, in light of the falling prices, mainstream mining rigs such as Antminer S17, Whatsminer M20S, and Avalon A1146 are only bringing in meager profits, with many models falling below the shutdown price.
The profit margins of crypto mining have been drastically minimized, and many miners have had to dump their BTC holding to just get by. Apart from the sluggish market conditions, local regulations on mining have also had a major impact on the mining revenue. For instance, not long ago, the New York Senate passed a bill that would set forth a two-year moratorium on certain crypto mining operations in the state of New York to mitigate the load on the local power grid. It is also a response to the call of CLCPA (Climate Leadership and Community Protection Act) for reducing greenhouse gas emissions.
According to data from CCAF, since China cracked down on mining farms in 2021, the US has replaced it as the global BTC hashrate center. In addition, BTC hashrates run in the state of New York account for 9.77% of the national total, ranking 4th among all US states. The new bill has aroused intense discussions among miners, many of whom are worried. However, the bill still needs to be signed by the Governor before it can take effect. In the meanwhile, miners operating in New York should pay close attention to the latest government action and be prepared for the worst.
In contrast, Thailand, a country in Southeast Asia, has taken a friendly stance on crypto mining. It has recently been reported that Mining Pro Co., Ltd. is spending 170 million baht to set up Thailand’s first cryptocurrency mine in Bangkok. The mine, to be set up in Bang Na, is expected to officially open its doors in early 2023.
When Thaksin Shinawatra, the former prime minister of Thailand was interviewed live on TV, some crypto users noticed that he’s got a Bitcoin clock behind him. This March, the Thai government announced that it would cancel the regulation that the income earned from digital asset transactions on approved exchanges must be taxed (personal income tax). In May, the government further relaxed the relevant tax policy: it will be waiving the 7% value-added tax for individual cryptocurrency investors until December 31, 2023. We can tell that the Government of Thailand hopes to attract more crypto enthusiasts and miners from all over the world through such measures to enable the growth of local financial technologies.
The Middle East country Dubai is also crypto-friendly. It is reported that the first brick-and-mortar Bitcoin store, located in downtown Dubai, has gone into service. There, users can convert a variety of cryptos, including BTC, ETH, BCH, and LTC, into cash or cash deposits.
In fact, back in 2021, the Government of Dubai announced that the Dubai World Trade Centre (DWTC) will become a “comprehensive zone and regulator” for virtual assets and cryptos, including digital assets, products, operators, and exchanges. The Dubai World Trade Centre Authority (DWTCA), UAE regulators, and the Securities and Commodities Authority have come to an agreement that will enable the trading of cryptocurrency in the Dubai economic free zone. It makes sense that Dubai has been called a paradise for cryptocurrency and is gradually becoming the global center of the crypto industry.
The countries/regions above have taken clear stances on crypto. However, there are also countries where the government disagrees with the central bank on cryptocurrencies, and Russia is one of them.
Although the Central Bank of Russia (CBR) has been urging the government to ban cryptos via legislation since 2014, the country has started to relax its crypto regulations after the government made cryptos legal in 2016.
At the end of January this year, CBR issued a consultation paper urging a broad ban on cryptocurrency, including the use, trading, and mining of cryptos, but has been rejected by the government, the parliament, and even the MVD (the Russian Ministry of Internal Affairs) and the Federal Security Service (FSB). As of early June, CBR has started to reconsider its stance on crypto mining as it plans to use cryptos for international payments.
The cold climate and cheap electricity mainly explain the appeal of Russia for miners from all over the world. Moreover, miners are always concerned with Russia’s stance on crypto mining because it is a major destination of BTC mining. So far, the good news is that some members of the Russian Federation believe it is only a matter of time before cryptos are developed and widely adopted in the country!
At the moment, most major countries still find cryptocurrencies suspicious. In particular, after a series of crypto scandals this year, including the sudden meltdown of Luna’s $40-billion financial empire and the liquidation of Three Arrows Capital, which holds $18 billion in crypto assets, government officials and people from traditional sectors that were previously on the lookout lost their last trust in cryptocurrency. There is still a long way to go before cryptos earn wider recognition, become more extensively adopted, and achieve further progress.