Putin Claims that Crypto Mining Has Benefits in Russia

Putin claims that Russia has a “competitive edge” in crypto mining due to a surplus of power and well-trained employees. Russian President Vladimir Putin has given crypto fans reason to be optimistic about the future of digital assets in Russia, which a recent campaign has threatened to outlaw cryptocurrency and mining.

“I’d like to start with an issue that is now in the limelight — the regulation of cryptocurrencies,” the strongman leader said in a video conference with members of the Russian cabinet on Wednesday.

In spring 2021, the price of electricity in Russia was around $0.06 per kilowatt-hour for domestic use. For commercial, it was $0.08 per kilowatt-hour, according to estimates. In context, 1 kWh of electricity costs $0.2 for households and $0.14 for enterprises in France; four times more expensive than in Russia.

Russian Central Bank Reacts

Last Thursday, Russia’s central bank released a paper suggesting a total ban on cryptocurrency trade and mining within the country. Ivan Chebeskov, Russia’s finance minister, spoke out against the proposed blanket ban on Wednesday, advocating for regulation rather than restriction. He emphasized that prohibiting cryptocurrency will force the country to lag in the global tech economy.

Meanwhile, Putin reassured his lawmakers that “the Central Bank does not stand in the way of our technology growth and is making the necessary steps to implement the most cutting-edge technology in this area of operation.”

Despite these promises, Putin admitted that extending crypto’s use “carries some dangers” because of its “extreme volatility.”

While Russia’s central bank has long been suspicious about cryptocurrency, Putin’s position has remained ambiguous. He stated in November 2021 that cryptocurrency is “not backed by anything, [and] the volatility is tremendous.”

The central bank said in 2020 that it was looking into the idea of a digital ruble. Its prototype testing should begin this month.

Telegram CEO Pavel Durov recently remarked on his messaging platform that the planned crypto prohibition will “destroy many sectors of the high-tech industry.”