The Kremlin seems confused about what path to take with cryptocurrencies as it doesn’t want to be left far from its rivals in the West who see enormous gains. Speaking at a video conference with government ministers, Russian President Vladimir Putin acknowledged the competitive advantages in crypto mining.
Keeping in mind the risks that come with cryptocurrencies, particularly the high volatility, Putin sees the potential of crypto mining hash rate in Russia. It has made Russia the third-largest country in the world for Bitcoin mining. Putin asked the government and the central bank to reach a unanimous opinion in the near future on the use of cryptos in the country. He also reassured government officials that the central bank was in no way a hurdle to Russia’s technological developments. It is making necessary efforts to introduce the latest technologies in this space.
Last week, the Bank of Russia had described cryptocurrencies as a threat to the country’s economic stability. It suggested a blanket ban on mining, trading, and use of crypto in Russia, as well as punishment for those found violating the ban on using digital assets for payments. However, Ivan Chebeskov, the head of the financial policy department at Russia’s Ministry of Finance, believes the country needs to regulate cryptocurrencies and not ban them.
Taking an opposite stance from the central bank, the Ministry of Finance opposed the blanket ban. It has prepared a set of proposals, which have to be evaluated by the government. Chebeskov said a ban on crypto transactions and trading would undermine the industry’s technological development. He highlighted that they need to give it space to breathe and develop.
The Bank of Russia had raised concerns about crypto mining saying that it creates unproductive uses of electric power. It said it threatens the power supply of residential buildings, social infrastructure, and enterprises. However, Vladimir Gutenev – the Chairman of the State Duma Committee on Industry and Trade, said crypto mining can continue legally with strict regulation in place.