Last week, the Central Bank of Russia said that Bitcoin mining should be banned. President Putin, on the other hand, seems to believe that Russia can achieve success in cryptocurrency mining.
Russian President Vladimir Putin stated today that Russia has “certain competitive advantages” when it comes to mining cryptocurrencies like Bitcoin, according to a document published on an official government website.
These positive comments from Putin come just a day after the government’s Ministry of Finance said it was “necessary to allow these technologies to flourish” and that a ban on cryptocurrency was not necessary.
Last week, Russia’s central bank called for a ban on Bitcoin mining and cryptocurrency transactions, causing panic in the crypto community. President Putin expressed his view on the matter in a video call with members of the government on Wednesday:
“The central bank has its own stance on cryptocurrencies, which, according to central bank experts, is related to the fact that the expansion of such activities carries certain risks, especially for the citizens of the country, given the high volatility and other aspects.”
Of course, we have certain competitive advantages here, especially in this so-called mining sector, due to the current surplus of electricity in the country and having well-trained personnel.”
Cryptocurrency mining is the process of verifying transactions on the blockchain and issuing new coins or tokens using powerful computers. Bitcoin mining is a process that consumes a lot of energy and requires expensive machines.
Russian Bitcoin miners provide more than 10% of computing power to the Bitcoin network, but despite this, the country’s authorities have repeatedly spoken of restrictions in the sector. China, which at one point hosted most of the world’s Bitcoin mining activity, recently banned the practice, citing environmental concerns. China’s ban on Bitcoin mining has since resulted in a mass migration of these miners to other parts of the world.
President Putin added today that he wants the Russian government and central bank to speak up and reach a “consensus” on the issue.
“Regulatory and government departments should reach a joint decision on cryptocurrency regulation in Russia in the near future.”
The Russian government has reportedly been tracking Bitcoin as a way to evade US sanctions since at least 2019. It is not yet clear whether the government actually bought any Bitcoin.
Meanwhile, the US has also threatened Russia with tougher economic sanctions if it invades its neighbor Ukraine. Moscow has reportedly deployed an estimated 100,000 troops near the border, and tensions between the West and Russia are escalating.
It is even said that Russia will be removed from SWIFT, the global payment system used by more than 11,000 banks in 200 countries.