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The President of the Russian Federation, Vladimir Putin, agrees with Russia's central bank that digital assets are highly volatile and pose a number of risks to the financial network. However, it sees the potential in cryptocurrency extraction as it could give Russia "some competitive advantages."
Not Against Mining
Last week, the Bank of Russia intensified its harsh stance on crypto by proposing a total ban. The institution claimed that the asset class resembles a pyramidal system, undermines the sovereignty of monetary policy and threatens the local financial system.
In a recent conference, the Russian leader – Vladimir Putin – said he is aware of the ongoing discussions on the matter and outlined that crypto regulation is currently “in the spotlight.”
Like the central bank, Putin said the expansion of the asset class entails some risks for investors given its high volatility. On the other hand, the President is in favour of cryptomining because it could be beneficial to his nation:
'Although, of course, we also have certain competitive advantages here, especially in the so-called mines. I mean the excess electricity and the well-trained personnel available in the country."
Subsequently, he urged the Bank of Russia and the local government to discuss the subject again and "come to some sort of unanimous opinion."
Putin's comments came a day after Ivan Chebeskov, a member of the Ministry of Finance, objected to the ban on cryptocurrency in Russia. Such legislation, he said, could cause Russia to fall behind in the global technology industry. As such, the government should regulate digital assets and not prohibit them altogether, stressed Chebeskov.
Interestingly, Russia is the third largest country in terms of bitcoin hash rate liability. Following China's complete ban on cryptography, tides changed, allowing us to take the lead, followed by Kazakhstan. According to Cambridge’s mining map, Russia’s hash rate share is nearly 14%.
Russian Crypto Mining merits compliance and regulation.
A few months ago, the Russian Ministry of Economic Development, the Ministry of Energy, and the State Duma insisted that cryptocurrency mining should be a legalized business regulated as an entrepreneurial activity.
Aleksei minaev – deputy director of development of mineka's digital economy – went further, thinking that the mining industry deserves "respect and regulation," he added that if it is legalized, the russian state could benefit from taxation, and people's incomes are going to be legal.
Anatoly aksakov – head of the State Duma – recalled that the exploitation of cryptocurrencies is not prohibited in Russia, but that it is not subject to clear fiscal rules. As such, he urged local watchdogs to improve regulatory clarity and proposed minors should pay higher electricity rates than other consumers.
