Putin is not against crypto mining in Russia. The country’s central bank, the Bank of Russia, agreed with President Vladimir Putin that digital assets are highly volatile and pose numerous risks to the financial system. However, he believes cryptocurrency mining may provide “undeniable advantages” to Russia.
Crypto mining in Russia
Last week, the Bank of Russia confirmed plans to completely prohibit crypto by proposing a complete ban. The asset class, according to the bank, is reminiscent of a pyramid scheme that undermines monetary policy sovereignty and endangers the country’s financial system.
At a recent meeting, Russian President Vladimir Putin – who is well aware of the discussions – said that crypto regulation is presently “in the limelight,” and that he was “watching closely.”
Like the central bank, Vladimir Putin believes that the expansion of crypto assets poses a number of dangers to investors, noting that their volatility is “unrealistic.” The President, on the other hand, supports crypto mining because it might benefit his country:
“Although, of course, we also have certain competitive advantages here, especially in the so-called mining. I mean the surplus of electricity and the well-trained personnel available in the country.”
He then requested the Bank of Russia and the local government to re-discuss the issue and “find some kind of consensus.”
On Sunday, Vladimir Putin said that cryptocurrencies should not be banned in Russia. Ivan Chebeskov – a member of the Russian Ministry of Finance – spoke out against the ban on cryptocurrencies one-day before. Mr. Chebeskov believes that such legislation might result in Russia falling behind in the global technology sector. As a result, the government should regulate digital assets and not completely ban them, he recommended.
It’s worth noting that Russia has the third-largest share of Bitcoin hash rate burden. Following China’s all-out crypto ban, the tides changed, allowing the US to take the lead and Kazakhstan to follow. According to Cambridge’s mining map, Russia’s hash rate role is about 14 percent.
