The market for mining hardware has dwindled since the Bank of Russia proposed a ban on digital currency minting and other crypto operations.
Russian internet markets have noted that mining hardware is now more frequently provided than sought. The trend started when the Central Bank of Russia (CBR) issued a consultation document earlier this month proposing a blanket ban on cryptocurrency operations, including mining, citing concerns to financial stability and investment risks.
According to RBC, a prominent online platform recently reported that the number of listings for coin minting equipment for sale grew in January, but demand fell. Marvel Distribution, one of Russia’s major retailers of these items, has also noticed a decrease in video card transactions.
Mining Chips Supply Surpasses Demand in Russia
According to one of the report’s sources, offers of video cards grew by 12% in January over December, while demand for GPUs fell by 4%. Last month, the supply of mining rigs climbed by 18%, while demand fell by 9% from the previous month of 2021. ASIC listings increased by 17%, but searches for specialist hardware decreased by 27%.
A representative from another marketplace corroborated the drop in demand, stating that the CBR study has marked a turning point in customer behavior. Despite President Putin emphasizing Russia’s competitive advantages as a mining destination, the monetary authority has been unable to obtain backing from other organizations.
Meanwhile, the federal government advocated a different strategy, focusing on regulation rather than outright prohibition of cryptocurrencies. Deputy Prime Minister Dmitry Chernyshenko signed a regulatory framework for the sector at the end of January, although it initially excluded crypto mining. Chernyshenko later authorized many key ministries and regulatory authorities to add mining to the document, according to a recent article by the newspaper Izvestia.
Industry experts have voiced reservations about whether it is technically viable to prevent the extraction of digital currency. Energy-rich Russia is one of the world’s most important mining hotspots, and its importance has grown since China initiated a crackdown on the industry in May. Officials in Moscow have been calling for mining to be recognized as a corporate activity, taxed appropriately, and miners to be charged higher electricity prices.