Putin believes that cryptocurrency mining has a number of benefits in Russia
Putin asserts that Russia’s “competitive edge” in crypto mining stems from a surplus of power and well-trained workers.
Russian President Vladmir Putin has provided a ray of light for crypto fans concerned about the future of digital assets in the nation, which have been threatened by a recent campaign to outlaw cryptocurrency and mining.
The strongman leader began a video conference with members of the Russian government on January 26 by stating that he would want to “start with a topic that is now in the limelight – cryptocurrency legislation.”
“Of course, we have certain competitive advantages here as well, particularly in the so-called mining sector. That is, the country’s abundance of power and well-trained employees.”
According to estimates, the price of electricity in Russia in spring 2021 was $0.06 per kilowatt-hour for residential usage and $0.08 for commercial use. To put this into perspective, a kWh of power costs $0.2 for households and $0.14 for businesses in France, which is four times the price in Russia.
He also urged the country’s central bank to convene a meeting with his administration in the near future to reach an agreement on the usage of cryptocurrency.
Russia’s central bank released a paper last Thursday suggesting a complete prohibition on domestic cryptocurrency trade and mining. According to the research, the dangers associated with cryptocurrency are “much greater for developing economies, including Russia.”
Russia’s Central Bank has been concerned about cryptocurrency for some time. Elvira Nabiullina, head of Russia’s Central Bank, said in December 2021: “We cannot accept investments in cryptocurrencies.”
Yesterday, Russian Finance Minister Ivan Chebeskov expressed resistance to the planned blanket ban, arguing instead for regulation. He emphasised that prohibiting cryptocurrency will force the nation to lag behind the rest of the world’s technology sector. “We must provide an environment conducive to the development of these technologies.”
Meanwhile, Putin told his lawmakers that “the Central Bank does not obstruct our technological advancement and is making the necessary measures to deploy cutting-edge technology in this field of business.”
Despite these promises, Putin acknowledged that growing cryptocurrency usage “involves some dangers” due to the currency’s “extreme volatility.”
While Russia’s central bank has long been suspicious about cryptocurrency, Putin’s stance has remained relatively ambiguous. In November 2021, he said that cryptocurrency is “not backed by anything” and “has tremendous volatility.”
The Central Bank said in 2020 that it would investigate the potential of a digital ruble, with prototype testing scheduled for this month.
Telegram CEO Pavel Durov recently said on his messaging app that the planned crypto prohibition will “kill a lot of sectors of the high-tech industry.”