Amid raising claims of potential risks to financial stability, Russia’s central bank proposed a blanket ban on the use, trade, and mining of all cryptocurrencies within its borders. However, following recent reports, a ban now seems less likely.
In a video conference held on January 26th, Russian President Vladimir Putin declared his stance on the issue, and it isn’t totally in line with the recent call from the Central Bank of Russia.
Putin Sees the Advantages to Crypto Mining
Although President Putin agrees with the central bank’s claims that crypto poses “certain risks, first and foremost to citizens of the country, given its significant volatility,” he has taken a slightly different stance when it comes to the area of crypto mining.
In speaking about crypto mining, President Putin said;
“We also have here certain competitive advantages, especially in so-called crypto-mining. I mean surplus in electricity and well-trained teams present in the country.”
The President has now called for a consensus following the central bank’s push for a blanket ban. In line with the President’s stance, Russian Finance Minister Ivan Chebeskov also said that Russia needs “to give these technologies the opportunity to develop.”
Russia is now one of the most attractive mining regions in the world due to its relatively cheap electricity. In Russia, 1 kWh of electricity costs $0.06 for households and $0.08 for businesses, compared to France’s $0.2 for householders and $0.14 for business.
Russia is currently the third-largest contributor to Bitcoin’s global hashrate, only behind the United States and Kazakhstan.
On the Flipside
- With a similar stance to the Russian central bank, E.U. regulator (ESMA) has called for a ban on proof of work Bitcoin mining in a bid to push renewable energy.
Why You Should Care
The Russian President’s attitude towards mining has given crypto enthusiasts a glimmer of hope that Bitcoin can avoid the same fate that the ban in China brought about.