President Vladimir Putin believes that by mining crypto, Russia will have “certain competitive advantages”. This was a day after the government’s Finance Ministry said these steps would be necessary if they want technology to develop. The banning of cryptocurrency does not need to be the solution.
Russian Bank wants to ban crypto mining :
One week prior to the discussion the central bank of Russia called for a ban on bitcoin mining and crypto transactions. In a video call with government members, Putin said. “As for cryptocurrencies, the central bank has its own position, it is related to the fact that, according to experts of the central bank, the expansion of this type of activity carries certain risks, and above all for the citizens of the country, given the high volatility and some other components of this topic”
He went on “Although, of course, we have certain competitive advantages here, especially in the so-called mining. I mean the surplus of electricity and well-trained personnel available in the country.”
What is mining?
Mining crypto is a complex process of verifying transactions on the blockchain and “producing” new tokens/coins by the use of powerful computers. This process uses a ton of energy and involves the use of expensive machines.
The bitcoin miners in Russia provide 10% of the computing power for the bitcoin network. However, they are looking to restrict that. China once hosted the majority of the world’s bitcoin mining. Although, recently they banned mining due to environmental concerns. This ban has caused the migration of miners to various parts of the world.
President Putin mentioned that the central bank and the government come to a conclusion regarding the issue of mining and crypto. Being that bitcoin has been a topic of discussion for several years now.
In the meantime, the United States has warned Russia with additional restrictions if it invades Ukraine’s neighbor. Moscow has stationed 100,000 troops along the border, heightening tensions between the West and Russia. There is talk of taking Russia out of SWIFT. The global payment system is used by over 11,000 institutions in 200 countries.