A Russian business has revealed a new fund that will be used to subsidize cryptocurrency mining operations in the country.
Finam management, a Russian investment management company, has introduced a new fund designed to finance cryptocurrency mining operations in the nation, according to Kommersant.
Only approved investors with a minimum investment of 300,00 rubles (about $4,000) will have access to the fund. According to the Kommersant source, the fund aims to gather 500 million rubles (more than $6,6 million) to create an LLC that will buy and lease mining equipment.
The remaining capital invested in the fund will be used to service the fund and cover operating expenses such as energy. According to the analysis, there are significant risks and advantages to investing in the cryptocurrency mining industry.
It also highlighted the absence of regulation in the cryptocurrency sector and the Central Bank of Russia’s anti-crypto stance. Russia’s central bank recently issued a warning against the legalization of cryptocurrencies, claiming that such a move could jeopardize the nation’s financial system.
The creation of the fund is still pending Russian regulatory approval, according to Kommersant. According to experts in the field, there is a good probability that the fund will be approved and that the central bank would change its position on cryptocurrency mining.
The inclusion of digital assets in mutual funds was previously prohibited by the Russian central bank. Yet, a small number of mutual funds that invest in businesses using blockchain technology have been authorized.
Finam Group CEO Vladislav Kochetkov stated that from March 1 a specialist repository would receive the mutual fund guidelines for approval.
Crypto Mining Picks Up In Russia
BitRiver, a company that offers services for the placement of mining equipment, reported that major banks, investment firms, and the U.K. had all expressed a sudden surge in interest in the company.
According to Artem Mayorov, director of the U.K.’s asset management division, the profitability of mining bitcoins at the present cost of equipment and exchange rate, depending on electricity expenses, can approach 50% annually.
Market players drew attention to the risks involved in equipment purchases, claiming that they quickly become outdated and lose their use in comparison to new supercomputers, which can have a substantial impact on the return on investment.
