Russia, one of the largest countries as per trading volume, had issued a statement a month back on bringing a comprehensive ban on the free circulation of cryptocurrency. Extending its previous commitment to the bank, a top Russian official informed that Russia could legally regulate the mining of cryptocurrency and stablecoins backed by gold that the government controls. This suggestion hints at the impending government decision of banning crypto, including mining, and its trade may change. Instead, the government could bring financial regulations on the circulation of cryptocurrencies.
Vladimir Gutenev, the chairman of the State Duma Committee on Industry and Trade, said the unregulated circulation of digital currencies should not be permitted as they pose risks to non-qualified investors. Russia might allow usage of Gold-backed stablecoins and cryptocurrency mining under the government’s supervision.
The use of cryptocurrencies is not allowed, Gutenev agreed, but Russia could use an unregulated stablecoin based on gold and controlled by the state. A financial product like this would be a fascinating proposition for private investors and firms. The product can also be used to save money, said the deputy as quoted in the Prime business news site. Russia can legally regulate the mining of cryptocurrency and stablecoins backed by gold that the government controls, an official in the top ranks of the Russian parliament have suggested. The suggestion comes following the Bank of Russia proposed comprehensive ban on the usage of cryptocurrency and its mining and trading.
Vladimir Gutenev, the chairman of the State Duma Committee on Industry and Trade, said the unregulated circulation of digital currencies should not be permitted as they pose risks to non-qualified investors. Russia might allow usage of Gold-backed stablecoins and the mining of cryptocurrency under the government’s supervision.
Russia is one of the cheapest countries in terms of electricity cost. While the United States costs $0.15 per kilowatt-hour of electricity consumption, Russia only charges $0.06, which is less than half the price of the United States. Apart from the cheaper energy, the cold climate further makes it a favorable region for the bitcoin miners. Currently, Russia contributes 11% of total Bitcoin mining around the globe. The United States leads the race with a 35% global share. These figures had changed after a complete ban on crypto mining in China. And the Bitcoin miners in Kazakhastan, which shares 18% and stands at the second number after the United States, are facing trouble from authorities over raising concerns of electricity wastages.
Commenting on the Bank of Russia’s request for a prohibition on mining cryptocurrency, Vladimir Gutenev informed in an interview with a local news channel that he believes that cryptocurrency mining could be legally operated. Their operations are under strict supervision by the state. Miners can profit from the abundance of energy resources and good climate in certain Russian regions if their infrastructure is powered transparently and they pay all required taxes.
Russia is still a favorite place for bitcoin mining companies and could be on top owning to its cheap electricity and favorable weather if mining could be regulated.
Gargi Sinha is working as Senior Journalist at Confea. She has completed her Masters in Journalism from Delhi University. She has interest in crypto and blockchain technology.