Russia could accelerate its trajectory to become one of the biggest Bitcoin (BTC) and crypto miners in the world – with reports that President Vladimir Putin has backed a measure that could see the industry legalized and subject to the government regulations.
Bloomberg reported that the move could be “good news” for the crypto mining industry, and claimed that “three people familiar with the matter” who had asked “not to be identified as the information is not public” confirmed Putin’s position. They said the president had “supported” a “Russian government proposal to tax and regulate” mining, and had “rejected the central bankthe proposal to ban it completely.
However, the plan offers a number of limiting measures that the industry may not like: the sources said the plan would “restrict mining to regions with excess electricity”, including Irkutsk, Krasnoyarsk and Karelia . All three regions already have a large number of crypto miners, due to their favorably cold weather conditions and energy surpluses.
The report notes that Kremlin spokesman Dmitry Peskov “refused to say what Putin’s position was”, but added that the president had “ordered the government and the Central Bank to settle their differences”, making echoing Putin’s own sentiments at the start of the week.
Yesterday, Cryptonews.com reported that Putin had taken note of Russia’s “certain competitive advantages” in the field of cryptography, “especially in the field of [crypto] mining.”
He specifically pointed out that the country has a surplus of electricity, as well as “well-trained personnel” versed in cryptography.
Through University of Cambridge– data compiled, at the end of August last year, Russia was the third largest bitcoin (BTC) mining nation in the world, behind only the United States and Kazakhstan.
However, this image may well have already changed dramatically. Many miners fleeing China’s crypto crackdown last year are believed to have moved to Russia. And Kazakhstan effectively unplugged many of its miners this winter following an energy price crisis – meaning Russia’s control of the global hashrate may well have soared above 11, 23% from August 2021.
Meanwhile, pro-crypto forces in government appear keen to push for “regulation, not bans” in response to calls from the Central Bank last week for a crypto and mining shutdown. .
Through RBC, the Department of Finance, which has – to some extent at least – defended the crypto industry against the staunchly anti-crypto central bank, has sent draft proposals to the government which, if accepted, would citizens to conduct crypto transactions through the conventional banking framework, providing personal data about crypto holders has been made transparent.
A similar system – with anonymity removed from the equation – has already been implemented in South Korea, where all crypto-fiat trading must be done through exchanges that partner with domestic banks.
The ministry reportedly claimed that crypto regulation would benefit the Russian state and help bolster tax revenue. The move, he claims, will help police and other agencies uncover criminal behavior.
He also warned that a lack of regulation – or a blanket ban – would lead to a thriving black market for crypto, and that this would ultimately undermine the crypto industry in its bid for mainstream acceptance.
The move follows comments from a number of senior MPs, including committee chairmen, who have denounced the Central Bank’s repeated calls for a ban. Some have gone so far as to say that the Central Bank’s position risks making Russia a “laughing stock” in the eyes of the international community.
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Learn more:
— Putin talks about Russia’s crypto credentials as tension mounts in Ukraine
– Here’s how the Ukraine crisis could impact Bitcoin and the crypto market
– It’s time to “solve all crypto problems”, says the Russian Parliament
– Putin says crypto is “not worthless” and has “a right to exist”
– Russian Foreign Minister: Crypto will inevitably play a role in international trade
– Kalashnikov wants to take down SWIFT and switch to “digital currency”
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