No Ban: Russia has a “competitive edge” in crypto mining say Putin

• Putin claims that Russia has a “competitive edge” in crypto mining due to a surplus of power and well-trained employees.

• Putin admitted that increasing the usage of cryptocurrency “carries certain dangers” due to its “extreme volatility.”

Russian President Vladimir Putin has given crypto fans reason to be optimistic about the future of digital assets in Russia, which has been threatened by a recent campaign to ban cryptocurrency and mining. The strongman leader began a video conference with officials of the Russian government on Jan 26 by stating he’d want to “start with a subject that is now in the limelight – cryptocurrency legislation.”

Blanket ban

Electricity in Russia is expected to cost $0.06 per kilowatt-hour for residential use and $0.08 for business use in spring 2021, according to projections. To put that in perspective, a kWh of power in France costs $0.2 for residents and $0.14 for businesses, which is four times more costly than in Russia.

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He also requested that the country’s Central Bank meet with his government in the near future to reach an agreement on the usage of cryptocurrency.

Russia’s central bank released a paper last Thursday suggesting a Blanket ban on cryptocurrency trade and mining within the country. 

Russia’s Central Bank has long been concerned about cryptocurrency. Elvira Nabiullina, governor of the Central Bank of Russia, stated in December 2021, “We cannot encourage investments in cryptocurrencies.”

Yesterday, Russian Finance Minister Ivan Chebeskov reacted angrily to the proposed blanket ban, urging control rather than restriction. He emphasized that a crypto prohibition would force the country to fall behind the global tech industry.

Meanwhile, Putin told his lawmakers that “the Central Bank is not limiting our technological advancement and is making the necessary measures to implement the newest technology in this field of work.”

Yesterday, Russian Finance Minister Ivan Chebeskov reacted angrily to the proposed blanket ban, urging control rather than restriction. He emphasized that a crypto prohibition would force the country to fall behind the global tech industry.

Despite these promises, Putin admitted that increasing the usage of cryptocurrency “carries certain dangers” due to its “extreme volatility.”

While Russia’s central bank has been suspicious about cryptocurrency for some time, Putin’s position has been rather unclear. He stated in November 2021 that cryptocurrency is “not backed by anything,  the volatility is tremendous.”

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Russia: 3rd highest hashrate in the Bitcoin network

The Central Bank said in 2020 that it was investigating the possibility of a digital ruble, with prototype testing scheduled for this month.

Telegram CEO Pavel Durov recently stated on his messaging platform that crypto prohibition will “destroy a lot of sectors of the high-tech industry.”

After China banned the product and its underlying mining sector in the summer, Russia ascended to third place on the list of countries with the biggest percentage of hashrate in the Bitcoin network last year. As a result of the exodus of bitcoin miners from China, mining farms have risen up in the United States, Kazakhstan, and Russia. The Eastern European country’s low-cost electricity and cold temperature are appealing to miners since they allow for bigger profit margins and hashrate production.