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January 31, 2022
Russian President Vladimir Putin thinks that his country could leverage its resources to benefit from bitcoin mining.
Last week, the Russian central bank called for a blanket ban on bitcoin mining and cryptocurrency trading.
The Ministry of Finance thinks this is a bad idea, as it could put Russia at a technological disadvantage.
“The central bank's stance has been prompted by concerns about crypto volatility, that could harm Russians,” Putin said. “On the other hand, we have energy surpluses that we can use to mine bitcoin.”
The President favors regulation and taxation over the banning of bitcoin mining. A legislative proposal reflecting his position will likely gain approval soon.
The regulatory framework may limit bitcoin mining to regions with surplus electricity. Such regions could attract mining companies forced to move their operations out of China. The bitcoin mining industry could act as a last resort buyer of electricity from renewable sources when overproduction occurs.
With a global bitcoin hash war underway, Putin’s proposal may signal Russia’s intentions to establish itself as a global player in bitcoin. The US has attracted the bulk of the hash power flowing out of China. If bitcoin fulfills its destiny, it is in Russia’s interest to grab its share of the hash rate.
