Russia Backs Bitcoin Mining Expansion Across BRICS

• Russia’s Sovereign Wealth Fund is channeling investments into Bitcoin mining across BRICS nations, aiming to facilitate global trade settlements in Bitcoin. 
• The concentration of mining within the BRICS nations may lead to network centralization, a potential risk for Bitcoin’s decentralized ethos.

Russia’s Sovereign Wealth Fund has made a decisive move to invest in Bitcoin mining across the BRICS nations, Brazil, Russia, India, China, and South Africa suggesting a strategic shift in the global financial landscape. In BRIC’s annual summit in Moscow on October 18, 2024, the entity formally welcomed four new members Egypt, Ethiopia, Iran, and the United Arab Emirates (UAE). Notably, this alliance accounts for 26% of the global economy and 45% of the population.

For investors, the BRICS mining expansion represents a double-edged sword. On one hand, an increased focus on Bitcoin by economically powerful nations could signal a broader acceptance and usage of digital currencies, potentially boosting BTC’s price. However, it also introduces risks. Regulatory shifts, geopolitical instability, and market volatility remain prominent challenges.

The Russian Crypto Law

As reported by CNF, Russia’s newly published crypto law extends significant state control over digital assets, marking a shift toward stricter oversight of the country’s growing crypto sector. Notably, the law grants the government power to halt mining pools in designated areas and oversee infrastructure providers that support mining activities.

The government’s objective is twofold: to prevent illicit financial activities and secure a more transparent crypto market under national control. The new legislation sets regulations for foreign partnerships and cross-border transactions, permitting Russian-mined cryptocurrency for international payments. 

However, mining companies are restricted from partnering directly with energy transmission, dispatch control, or electricity generation entities. Pool operators and data centers must verify clients and report suspicious activities, with oversight by the Federal Tax Service, Financial Monitoring Service, and Federal Security Service. These measures aim to enforce strict compliance, boost transparency, and control potential risks in Russia’s crypto industry.

Could This Push BTC to $3 Million?

Speculation about Bitcoin reaching astronomical values, such as $3 million, is hardly new, but BRICS’ mining efforts might lend credibility to the forecast. Matthew Sigel, head of digital assets research at VanEck, predicts that Bitcoin could reach $3 million by 2050 as it becomes a widely accepted reserve asset. He anticipates a 2% allocation of Bitcoin by central banks, which could drive its value significantly. Sigel estimates that over the next few decades, Bitcoin may grow at an average annual rate of 16%, ultimately achieving this ambitious target.

However, for BTC to achieve a $3 million valuation, several factors need to align. BTC has struggled below the $70,000 price for over four months. At the time of writing, BTC exchanged hands with $70,900, representing a mild 3.82% increase over the past 24 hours.

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